If bubble bursts, prez will eat a tweet lunch
P RESIDENT Trump has taken
the bait — just like all presidents do.
With attacks coming from both sides of the aisle, Trump has pumped up his chest and declared “highest stock market EVER, best economic numbers in years, unemployment lowest in 17 years, wages rising, border secure: No WH chaos.”
That was a tweet from the other day. And it is one that Trump might repeat tomorrow after the employment figures for July are posted by the Labor Department.
The “experts” expect job growth of 180,000 and the unemployment rate to fall to 4.3 percent from 4.4 percent. I myself don’t have a guess this month because the numbers are too unpredictable this time of year.
If July’s job growth is near the anticipated 180,000, it will aid the president in the one area that people really care about — their wallets. It will also help extend a winning streak on jobs that goes back only to March.
In the past three months, the average monthly job gains have been 194,000. Not great, just average.
The trouble is that Trump may soon have to eat his tweet. Despite the job figures and what Wall Street might want you to believe, the economy isn’t doing very well.
While the nation’s gross domestic product did grow at an estimated 2.6 percent annual rate in the April to June quarter, the GDP was revised lower — to just a 1.2 percent annual rate — in the first quarter.
Put the two quarters together and economic growth has been an anemic 1.9 percent so far this year. Plus, sales in the auto business, one of the biggest employers in the nation, are collapsing and other industries are showing weakness.
And remember, those modestly good job figures could be the result of seasonal quirks that could reverse during the summer months into the fall.
Trump is definitely correct in saying the Dow Jones industrial average is the highest ever. But many, many people think there’s a bubble. And if Trump is betting on a bubble continuing, he better have more luck than he did during his casinooperating years in Atlantic City.
Just in case you think I’m reading the economic data with a pessimist’s eye, you should know that my view is the same as that of Stanley
Fischer, vice chairman of the Federal Reserve. In Rio the other day, Fischer said that low interest rates were “a powerful signal that the growth potential of the economy may be limited.”
Fischer is apparently the only honest member of the Fed. He cited the Congressional Budget Office estimate that the potential for economic growth is probably closer to 1.5 percent a year than the 3 percent Trump wants.
Fischer should be made the next Fed chair. It would be nice to have a straight talker in that job.
Three things to think about during these lazy, hazy, crazy days of summer: missiles that can shoot down jetliners, dirty bombs filled with radioactive material and how the new White House Chief of Staff
John Kelly became so close to Trump so quickly.
I’m going to tell you a story you urgently need to know. Kelly already knows and so does Trump. Their relationship will be clearer after you read this.
Kelly, the former head of Home- land Security, was named Trump’s chief of staff last week when Reince
Priebus, former head of the Republican National Committee, got the ol’ heave-ho.
A lot of other people could have gotten Priebus’ job, but it went to Kelly. Why?
Some think it was because Kelly, a retired Marine general, would keep strict order in the White House, something that was obviously lacking under Priebus. Others think Trump just took a liking to Kelly.
While both those may be so, I don’t think they were the main reasons Kelly got the job.
Kelly, as head of Homeland, has been talking loudly about terrorist threats in recent months. Speaking on CBS recently, Kelly said a threat to aviation is what keeps him awake at night.
“You know, we know that would be the Super Bowl for the terrorists, to knock down an airplane in flight, particularly if it was full of Americans,” Kelly said on “Face the Nation.”
Kelly has also said that threats from south of the border keep him awake. So, put the two statements together — along with what a very good source is telling me — and it means that Kelly believes there’s a threat to US planes that will come from south of the border. That happens to be where Mexico is located. And there are also worries about threats to major population centers from dirty bombs with the material also coming through Mexico. Put Kelly’s emphasis on threats coming from Mexico together with Trump’s obsession with a wall stretching across the southern US border, and the idea of bringing the Homeland Security chief into the White House makes perfect sense. And if Kelly can prove there was an actual threat and stop it, not only will his status rise but also Trump’s presidency will get a major boost. Many other media outlets in this country despise Trump, and they are letting it affect their ability to get important information to readers. In my next few columns, I’ll detail some other stuff that Americans — and especially investors — need to know that can affect the markets.