Strong U.S. Economy is Trump’s Ace in Dealing with China

Aug. 2, 2019
Bob Adelmann

Donald Trump is no fool. In fact if his IQ of 156 is any indication, he is
at the genius level. At least that's what UCD (University of California,
Davis) psychologist Dean Keith Simonton thinks (see Sources below).

And he knows that the clock is ticking on his reelection efforts. He knows
that he has a lot going for him: promises made/promises kept; confronting
the immigration onslaught; challenging the communist Chinese over stealing
American technology; exposing the media for being nothing more than paid
mouthpieces for the left and the Deep State; nominating conservative judges
at near record levels; and an economy that continues to impress with its

But he would welcome a favorable conclusion to the trade talks currently on
hold with the Chinese. If a deal could be consummated (the sooner the
better), he'd have an additional talking point, and an economy that is even
stronger without the tariff headwinds.

Just how strong is the economic "ace" that Trump is currently holding in
his negotiations with the communists? A cluster of economic reports just
released confirms the continuing strength of the U.S. economy.

Wednesday's report from accounting firm ADP showed job growth across all
sectors of the economy in July as well as across all sizes of businesses.
The goods-producing sector - mining, construction and manufacturing - added
9,000 jobs last month while the services sector - transportation,
education, health care and hospitality - gained 146,000 jobs. Small
businesses - 1-49 employees - hired 11,000 new people in July; medium-sized
businesses - 50-499 employees - added 67,000 workers; and large businesses
- over 500 employees - brought on 78,000 people.

This was in line with expectations and well above the estimated 100,000 new
jobs needed to keep up with population growth.

Thursday's report from the Labor Department showing further declines in
initial claims for unemployment insurance benefits confirmed the health of
the labor market. This was expected, as Fed Chairman Jerome Powell noted in
his remarks following the board's decision to cut the Fed Funds rate by
one-quarter of one percent: "People who live and work in low-and
middle-income communities tell us that many who have struggled to find work
are now getting opportunities to add new and better chapters to their

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Indeed those "new and better chapters" are characterized by remarkable
growth in real (inflation-adjusted) wages, as noted by the U.S. Bureau of
Economic Analysis (BEA): "Wages in the United States increased 5.48 percent
in June 2019 over the same month in the previous year." According to the
BEA wage growth has been increasing since last December, staying at or
above five percent on an annualized basis since February. Put another way,
a worker earning $20 an hour a year ago is now making $21 an hour. In
addition, he is keeping most of it in his pocket as inflation remains
benign, at well below two percent.

Parsing the BEA report reveals another bright spot: Based on slightly
different metrics, the number of employed workers increased by 247,000 last
month, 91,000 higher than ADP's report. Further, the number employed
full-time increased by 453,000 last month, while the number of part-time
workers fell by 174,000. This confirms that not only are there more
full-time workers, many part-time workers are being promoted to full-time

All of which continues to be reflected in consumer confidence as reported
by the University of Michigan's index. It moved higher in July to 98.4 from
July 2018's 97.9, while its Index of Consumer Expectations jumped by 3.2
percent, from 87.3 in July a year ago to 90.1. Said Michigan's chief
economist Richard Curtin: "Consumer sentiment remained … at quite
favorable levels since the start of 2017."

Other factors, including lower gas prices thanks to increases in U.S.
energy production of crude oil and lower interest rates by the Federal
Reserve, all bode well for the U.S. economy into the future. When compared
to the German economy, which is virtually flat, and the Chinese, which may
also be flat (see Sources below), Trump holds a strong ace in his dealings
with them.

Add in successful closure to the ongoing talks with the Chinese (talks are
scheduled to restart in September) and a significant reduction in tariffs
on more than $200 billion of Chinese imports, and the president would more
than likely be elected to a second term. He's smart enough to know all
that. But the clock is ticking.



Donald Trump's IQ is 156 - genius

United States Wages and Salaries Growth

U.S. Weekly Jobless Claims Rise; Labor Market Still Tightening

ADP National Employment Report for July 2019

ADP Press Release on July report

Index of Consumer Sentiment for July 2019

China Reports Its Economy Growing at Slowest Pace Since 1992

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