Not withstanding positive economic growth, low unemployment, and declining inflation, 58% of voters say the economy has gotten worse over the past two years, only 28% say it has gotten better, and nearly 75% say inflation is headed in the wrong direction, according to an end-of-August Wall Street Journal poll of registered voters (WSJ 9/4/2023).
- Fuelled by robust consumer spending, the U.S. economy is on a path to 2% real growth in 2023. PCE core inflation is trending at 2.9%, and August CPI core inflation reported this coming Wednesday is expected to show the same.
- The U.S. labor market is almost back in balance 3-1/2 years after the Covid-19 related economic shut-down in March 2020. The gap between job vacancies and unemployed people is narrowing, with a recent 736,000-person growth in labor force participation, especially among parents with children not yet in school.
- The Federal Reserve reported last week that its M1and M2 measures of money supply continue to contract which historically triggers economic contraction with a lag of about 18 months. Bank loan growth continues to slow but so far is not contracting, even for commercial real estate which is surprising in view of the decline in office property valuations.
The G20 leaders’ summit in India is helping the U.S. improve trade relations and a more western oriented global economic alignment. China President Xi and Russia President Putin not attending gave U.S. President Biden opportunities with India, Brazil, South Africa, and other leaders to improve mutual economic and political ties.
- The U.S. and India agreed that forward-deployed U.S. Navy ships can be maintained and repaired in India’s ports.
- G20 leaders announced efforts for new transportation, energy, and technology connectivity from India through the Middle East to Europe to improve research, development, communication, and trade.
- At the insistence of India, there was no condemnation of Russia’s invasion of Ukraine, only a statement that countries “must refrain from the threat or use of force to seek territorial acquisitions” and that “the human suffering and negative added impacts of the war” are lamentable.
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