Don’t Worry About a Recession. Yet.

Still shopping. Just doing a little bit less of it.
Photo: David Paul Morris/Bloomberg via Getty Images

The economic data has gotten confusing again. For two months running, we have had very strong jobs reports, showing accelerated job growth and wage growth. On the other hand, consumer sentiment nosedived in January, and now we have learned seasonally adjusted retail sales unexpectedly fell in December, the key Christmas shopping month.

A report from the Census Bureau said retail sales fell 1.2 percent in December, after adjusting for seasonal variation, the fastest rate of decline since 2009. Some of the decline was due to falling gas prices (when gas is cheaper, people spend less at gas stations, for obvious reasons) — but even after adjusting out gasoline sales, the drop was 0.9 percent.

What’s going on here? Is the economy getting stronger or weaker?

“I find it mystifying,” says Jason Furman, a professor of economic policy at Harvard’s Kennedy School of Government and former top economic adviser to Barack Obama.

Furman says we’re seeing signs of slowing economic growth at the same time as robust employment growth. That could be explained by low productivity growth: More people are working, but they’re not getting a lot better at what they’re doing. But that would be inconsistent with the recent wage data — wages are rising faster than prices, which tends to happen when productivity growth is strong.

As for consumer sentiment, which fell in January to its lowest level since Trump was elected, Furman says the government shutdown was a likely factor. If so, we may see improvement in the February survey. Furman also said he found, when looking at past shutdown and debt-limit disputes, these events appeared to affect measures of consumer sentiment but did not affect economic activity in a way that could be measured at the economy-wide level. So, this drop in sentiment may not tell us much about the real economy.

Ernie Tedeschi, a former Treasury Department economist who now produces economic forecasts for the investment advisory firm Evercore, emphasizes that a slowdown in the rate of economic growth is consistent with forecasts from the Federal Reserve and others. He says there was a “sugar high” from the expectation and enactment of the tax cut bill, and as that wears off, you should expect the economy to grow more slowly — which is not to say you should expect a recession, in which the economy actually shrinks.

“We’re for the most part talking about magnitudes of positive growth,” he said. “We’re debating whether or not different measures are as good as we expect them to be. We’re still not in a world where — I think, I hope — we are talking about things being, in absolute terms, bad.”

Okay, but what about the falling retail sales number? That’s not a slowdown in growth. That’s an actual decline. But, it is only one month of preliminary data. We may get a later revision that makes the figure look better. Tedeschi also notes the survey on retail sales was conducted during the government shutdown, which could be an added factor influencing its accuracy.

“The Census Bureau swears that even though there was the government shutdown, that they were still getting timely data, complete data, response rates were actually a little higher than normal,” he told me. “I trust them, but we can’t rule out that there’s some tainting of the data because of the government shutdown.”

Furman is also more inclined to look at the (positive) jobs numbers, rather than the (worrying) figures on economic output like retail sales.

“As a general rule, I would place two-thirds weight on employment data and one-third weight on output data in signal extraction,” he told me, regarding which economic indicators tell you most about where the economy is headed, based on research he did at the White House Council of Economic Advisers. “And in this case, since it is not the full output data, would put even less than one-third weight on it.”

Doug Holtz-Eakin, the president of the conservative American Action Forum and a former top economic adviser to George W. Bush and John McCain, told me he hasn’t yet come up with a story to reconcile the contradictory data because it’s early yet. The sentiment number and the retail number both look bad — but in each case, it’s just one month of data.

“Those can both be pretty noisy, so I’m just waiting for more info,” he said.

Don’t Worry About a Recession. Yet.

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As New York’s David Wallace-Wells puts it, “Sometimes it almost feels like western intuitions of climate doom are just projections of imperial decline.”

China is taking its renewable energy push to new heights, with scientists revealing plans to build the first solar power station in space.

A solar power station orbiting the earth at 36,000 kilometres could tap the energy of the sun’s rays without interference from the atmosphere, or seasonal and night-time loss of sunlight, Chinese media reported.

A researcher from the China Academy of Space Technology Corporation, Pang Zhihao, said a space solar power station held the promise of providing “an inexhaustible source of clean energy for humans”.

It could reliably supply energy 99 per cent of the time, at six-times the intensity of solar farms on earth, he said.

The next step will be a Megawatt-level space solar power station, slated for construction in 2030.

The legal challenges to Trump’s national emergency are rolling in

We believe your declaration of an emergency shows a reckless disregard for the separation of powers and your own responsibilities under our constitutional system. The Constitution vests the Congress with the power of the purse and expressly provides that “no money shall be drawn from the Treasury, but in consequence of appropriations made by law.” Congress has entrusted you and your predecessors with emergency authority in order to respond quickly and effectively to real crises, such as wars and disasters.

The Judiciary Committee, which has jurisdiction over the National Emergenices Act, did so based on an understanding that the President would “tae care that the laws be faithfully executed” and would resort to this authority only when absolutelly necessary. By fabricating an emergency in order to bypass the political process for allocating a budget, you appear to be abusing both this trust and your own oath of office.

The House Judiciary Committee

Harris secures an important home-state endorsement

Kamala Harris is a fearless fighter. A voice for the voiceless and vulnerable. From advancing equality to defending immigrant communities to expanding opportunity, she’ll do what’s right. Proud to endorse

@KamalaHarris

for President.

pic.twitter.com/3MGPBcUigR

@GavinNewsom

Any press is good press?

Photo: Media Matters

russia investigation

russia investigation

Mueller Recommends Paul Manafort Receive Up to 24 Years in Prison

By Matt Stieb

Unfortunately for Manafort’s chances of ever getting out of prison, this recommended sentence only deals with his financial convictions in Virginia.

Trump’s emergency declaration faces its first court hurdle

A consumer advocacy group filed the first lawsuit late Friday challenging President Donald Trump’s national emergency declaration, suing on behalf of Texas landowners and an environmental group who say they’ll be affected by border wall construction.

The case, filed by Public Citizen in federal district court in Washington, DC, is the first of what are expected to be multiple lawsuits challenging Trump’s unprecedented decision to declare a national emergency in order to access $3.6 billion in military construction funds to pay for more sections of the wall he promised to build along the US–Mexico border.

Public Citizen is arguing the president exceeded his authority under the federal National Emergencies Act because there is no emergency at the southern border, and that his declaration of a national emergency in order to build the wall violates the separation of powers — essentially, that it’s unconstitutional for Trump to declare an emergency because Congress already refused to appropriate the money.

Public Citizen is one of several groups that have announced plans to sue the administration, but are the first to file. House Democrats are considering going to court to challenge the emergency, as are Democratic attorneys general. At a press conference Friday, California Attorney General Xavier Becerra said his office was likely to pursue legal action.

Key sections from Mueller’s sentencing recommendation for Paul Manafort

The defendant stands convicted of the serious crimes of tax fraud, bank fraud, and failing to file a foreign bank account report. Manafort was the lead perpetrator and a direct beneficiary of each offense. And while some of these offenses are commonly prosecuted, there was nothing ordinary about the millions of dollars involved in the defendant’s crimes, the duration of his criminal conduct, or the sophistication of his schemes.

Together with the relevant criminal conduct, Manafort’s misconduct involved more than $16 million in unreported income resulting in more than $6 million in federal taxes owed, more than $55 million hidden in foreign bank accounts, and more than $25 million secured from financial institutions through lies resulting in a fraud loss of more than $6 million.

Manafort did not commit these crimes out of necessity or hardship. He was well educated, professionally successful, and financially well off. He nonetheless cheated the United States Treasury and the public out of more than $6 million in taxes at a time when he had substantial resources. Manafort committed bank fraud to supplement his liquidity because his lavish spending exhausted his substantial cash resources when his overseas income dwindled.

Special counsel investigation

Special counsel recommends Manafort receive a sentence somewhere between 19.5 to 24.5 years, potentially putting him in prison until he is 93

JUST IN: Special Counsel Mueller recommends former Trump campaign chairman Manafort be sentenced to 19-24 years in prison – court filing

pic.twitter.com/B9XyncEjU3

@Reuters

politics

You Can’t Stop a Power Grab by Fact Checking It

By Sarah Jones

Trump’s national emergency stems from an ideological problem, and it won’t be fixed by fact checking.

China has its own fascinating relationship with debt

“Of the 22.9 trillion yuan ($3.4 trillion) of outstanding mortgage debt held by Chinese people as of the end of 2017, 47.1% of that is tied up in residences that now stand empty”

https://t.co/MHkUUh8U0y

@M_C_Klein

william weld

William Weld and the Strange Allure of No-Hope Primary Challenges

By Ed Kilgore

So many people think Trump ought to have a primary challenger that they’ll exaggerate the importance of anyone who shows up.

The House Oversight Committee chairman believes Trump’s attorneys may have lied about Cohen’s payments to women alleging they had affairs with the president

“It now appears that President Trump’s other attorneys — at the White House and in private practice — may have provided false information about these payments to federal officials,” [Elijiah] Cummings (D-Md.) wrote in a letter to White House Counsel Pat Cipollone.

Cummings named Sheri Dillon and Stefan Passantino as the two attorneys who might have made false statements to the Office of Government Ethics (OGE), citing documents the committee obtained from the office.

According to Cummings, Dillon “repeatedly stated to federal officials at OGE that President Trump never owed any money to Mr. Cohen in 2016 and 2017.” Passantino, who served as deputy White House counsel for compliance and ethics, reportedly told OGE that Trump and Cohen had a “retainer agreement” — a claim that was later contradicted by federal prosecutors in the Southern District of New York.

The 9/11 fund is running out of money and victims will suffer

The September 11th Victim Compensation Fund plans to cut future payouts in half — and in some cases by as much as 70 percent — as it struggles with a surge of new claims from those who have gotten sick and the families of those who have died, officials announced Friday.

The fund was opened by the federal government in 2011 to compensate for deaths and illnesses linked to toxic exposure at the World Trade Center, the Pentagon, and in Shanksville, Pa., after terrorists crashed four hijacked airliners in 2001. To date, the $7.3 billion fund has paid about $5 billion to roughly 21,000 claimants. About 700 were for deaths that occurred long after the attacks.

Four injured in Aurora, Illinois shooting

Multiple people have been injured at a manufacturing plant in Aurora, Illinois, on Friday and a shooter has been apprehended, authorities said.

Officers responded to reports of an active shooter at the Henry Pratt Company, the city announced just after 2 p.m. CST. The Aurora Police Department tweeted at 3:30 p.m. that the situation “has been secured. Shooter is no longer a threat to the area.”

At least two patients have been admitted at Amita Health/Presence Mercy Medical Center, the hospital told NBC News. There is no information on their conditions yet.

Another two patients are being treated at Rush Copley hospital with non-life threatening injuries.

Heartbreaking: The worst person you know just made a great point

Look, the only national emergency is that our president is an idiot.

Ann Coulter

Kamala Harris lands a big endorsement

Dolores Huerta, the iconic labor and civil rights leader who co-founded what became the United Farm Workers, is endorsing Sen. Kamala Harris (D-Calif.) for president, according to a statement shared first with POLITICO.

Huerta, who started the National Farmworkers Association alongside the late Cesar Chavez, is also signing onto Harris’ campaign as a California co-chair, joining Rep. Barbara Lee, a former Congressional Black Caucus chair, who endorsed Harris on Wednesday.

Huerta’s backing is a significant development in the early stages of the 2020 campaign and gives the California senator a leading voice in the labor movement and among Latinos nationally.

Sarah Sanders joins the club

Special counsel Robert Mueller’s team has interviewed White House press secretary Sarah Sanders, she told CNN on Friday.

“The President urged me, like he has everyone in the administration, to fully cooperate with the special counsel. I was happy to voluntarily sit down with them,” Sanders said in response to a question from CNN.

The interview is one of the final known interviews by Mueller’s team. It came around the same time as the special counsel interviewed former White House chief of staff John Kelly, well after a number of other senior officials, including former White House communications director Hope Hicks and former press secretary Sean Spicer, were brought in for questioning.

privacy

Even If You Delete Your Account, Twitter Doesn’t Delete Your DMs

By Madison Malone Kircher

A new report from a security researcher might make you think twice about your messages.

Roger Stone ordered to shut up

BREAKING: GAG ORDER on Roger Stone’s criminal case, per judge. No statements can be made by lawyers involved. Nobody including Stone can speak about the case around the courthouse. Stone isn’t restricted as generally as his lawyers

@kpolantz

national emergency declaration

national emergency declaration

Trump Declared a National Emergency Because He’s a Fox News Addict

By Eric Levitz

With his emergency declaration, Trump prioritized pleasing Sean Hannity over appealing to swing voters. That is an idiotic 2020 strategy.

Colin Kaepernick strikes a deal with the NFL

Former San Francisco 49ers quarterback Colin Kaepernick and Carolina Panthers safety Eric Reid have reached a settlement with the NFL concerning their collusion grievances against the league, it was announced Friday.

“For the past several months, counsel for Mr. Kaepernick and Mr. Reid have engaged in an ongoing dialogue with representatives of the NFL,” attorney Mark Geragos and the NFL said a joint statement issued Friday. “As a result of those discussions, the parties have decided to resolve the pending grievances. The resolution of this matter is subject to a confidentiality agreement so there will be no further comment by any party.”

Kaepernick filed a grievance last fall under the collective bargaining agreement alleging collusion against signing him to an NFL contract.

British students walk out to protest inaction on climate change

Thousands of schoolchildren and young people have walked out of classes to join a UK-wide climate strike amid growing anger at the failure of politicians to tackle the escalating ecological crisis.

Organisers said more than 10,000 young people in at least 60 towns and cities from the Scottish Highlands to Cornwall joined the strike, defying threats of detention to voice their frustration at the older generation’s inaction on the environmental impact of climate change.

Anna Taylor, 17, one of the most prominent voices to emerge from the new movement, said the turnout had been overwhelming. “It goes some way to proving that young people aren’t apathetic, we’re passionate, articulate and we’re ready to continue demonstrating the need for urgent and radical climate action.”

Why these people spent Valentine’s Day with Howard Schultz

“We bought these tickets before he said he might run. We’re not fans. I’m definitely not broadcasting that I’m here on social media; I’m anonymous,” said Courtney Adams, a nanny who had driven almost three hours with her sister-in-law to be here because she didn’t want to eat the ticket. “I mentioned we bought these tickets before he said he might run for office, right?”

“Valentine’s Day is always a disaster,” said Tom Sheeran, sitting beside his date, Theresa Harrison, in a center pew. “Restaurants are always crowded, roses are expensive, people are miserable, so how could this be any worse?”

“My wife’s in Ethi­o­pia. and I didn’t have any plans for Valentine’s Day, so why not?” Selcuk Karaoglan said. “But I don’t really even like Starbucks.”

the top line

Don’t Worry About a Recession. Yet.

By Josh Barro

New retail data shows a slowdown by consumers. But how does that square with red-hot job numbers?


national emergency declaration

national emergency declaration

Trump Counting on Supreme Court to Vindicate His Emergency Declaration

By Ed Kilgore

Trump did the legal case for his emergency declaration no good in his rambling press appearance announcing it.

The border crisis is fake, but the military housing crisis is real

Deeply troubled by military housing conditions exposed by Reuters reporting, the U.S. Army’s top leadership vowed Friday to renegotiate its housing contracts with private real estate firms, test tens of thousands of homes for toxins and hold its own commanders responsible for protecting Army base residents from dangerous homes. …

The Reuters reporting described rampant mold and pest infestations, childhood lead poisoning, and service families often powerless to challenge private landlords in business with their military employers. Many families said they feared retaliation if they spoke out. The news agency described hazards across Army, Navy, Air Force and Marine Corps base housing communities.

Here’s where Trump’s getting his border wall money

In addition to $1.375 billion included in the bill passed by Congress, Trump plans to draw money from a mixture of drug forfeiture funds, military projects and other accounts.

Trump is eyeing about $600 million from a Treasury Department drug forfeiture fund and $2.5 billion from a Defense Department drug interdiction program, according to officials.

In addition, the president wants to use $3.6 billion in military construction funds to help build his new border barriers.

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