06/02/2018

The US Economy Suddenly Looks Like It's Unstoppable [Watch]

Jeff Cox, CNBC

  • Friday's economic data provided evidence the U.S. economy is heading into the second half of 2018 with strong momentum.
  • Nonfarm payrolls beat expectations while manufacturing and construction indexes both showed accelerated growth.
  • Economists are slowly ratcheting up expectations for growth through the end of the year, with widely followed measures putting the second quarter at between 3.6 percent and 4.8 percent.

In the face of persistent fears that the world could be facing a trade war and a synchronized slowdown, the U.S. economy enters June with a good deal of momentum.

Friday's data provided convincing evidence that domestic growth remains intact even if other developed economies are slowing. A better-than-expected nonfarm payrolls report coupled with a convincing uptick in manufacturing and construction activity showed that the second half approaches with a tail wind blowing.

"The fundamentals all look very solid right now," said Gus Faucher, chief economist at PNC. "You've got job growth and wage gains that are supporting consumer spending, and tax cuts as well. There's a little bit of a drag from higher energy prices, but the positives far outweigh that. Business incentives are in good shape."

The day started off with the payrolls report showing a gain of 223,000in May, well above market expectations of 188,000, and the unemployment rate hitting an 18-year low of 3.8 percent.

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In Search Of History

4,000 Years Of Price Control

Tablets, said to be 200 years older than the Babylonian Code of Hammurabi ... show that the ancient kingdom of Eshnunna had wage control and price control. The news ought not to have come as a surprise. For the code of Hammurabi itself (unearthed in 1902), which was promulgated earlier than 2000 B.C., fixed prices, wages, interest rates, and fees. This makes price control at least about 4,000 years old. ...

 

Ironically, it is those who now wish to return to this ancient totalitarian device who are fondest of calling themselves “progressives.” They are also fond of saying that those who believe in economic liberty “are living in the nineteenth century.” These controlists have yet to learn that they themselves are still living, as the discoveries in Babylonia attest, in the nineteenth century—B.C.!

-- Henry Hazlitt,

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FreeMarket Central

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    FreeMarket Central BLS: 4.05%
    FreeMarket Central Shadow Stats: 21.5%
  • Inflation:
    FreeMarket Central November Year-to-Year: 2.87% (CPI-U*)
    FreeMarket Central Shadow Stats: 9.9%

*[cpi-u is the Bureau of Labor Statistics inflation rate for all urban consumers]

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