In an era when media competition is intense, good news is rarely reported. Consequently, many Americans do not know that:
- With 120 countries experiencing economic growth in 2017, a strong, synchronized global economic recovery has begun
- The International Monetary Fund (IMF) currently forecasts 3.9% global economic (GDP) growth for both 2018 and 2019
Instead of focusing on the global economic recovery, there has been a focus on any negative stories.
News coverage featured the North Korean nuclear stand-off until those fears subsided. Trade war stories have moved to the forefront and were blamed for recent market volatility.
With many countries quickly receiving tariff exemptions, it appears that tariff announcements are merely an initial negotiating tool of the President. Having excessive trade surpluses with the US, China, Japan and South Korea were not exempted from the tariffs. Due to enormous trade imbalances, a trade war would more negatively affect those countries than the US.
As such, South Korea has already agreed to change its trade agreements to make them more favorable (or less unfavorable) to the US. Having record trade surpluses, China and Japan could soon follow. Recently China’s President, Xi Jinping, signaled a conciliatory posture regarding a trade-war at the Asia annual economic summit. Mr. Xi stated China’s commitment to further economic liberalization through greater intellectual property protection and increased foreign company access to China’s financial and manufacturing sectors.
Meanwhile, domestic economic activity is strong. During the first quarter, consumer confidence made 18-year high and job openings reached a new record. Jobless claims of 230,000 are near 50-year lows.
According to Duke University, US Chief Financial Officer optimism is at a multi-decade high. About a third plan to increase wages, hiring, domestic investment and/or retirement contributions.
Employment data suggests that the US is reaching full employment and wage growth should accelerate. Federal disability beneficiaries are declining as companies lure people back into the workforce. This extremely rare occurrence is one of many figures showing how tight the labor market is.