Trans-Pacific Partnership Accord Opens Agricultural Markets in Japan and Canada
The US, Japan and 10 other countries around the Pacific reached a historic accord Monday to lower trade barriers to goods and services and sets commercial rules of the road for two-fifths of the global economy. For the US, the Trans-Pacific Partnership accord opens agricultural markets in Japan and Canada, tightens intellectual property rules to benefit drug and technology companies, and establishes a tight knit economic bloc to challenge China’s influence in the region.”
Some like this deal, others are totally against it. The Congress is divided and will vote on it, likely in January. The House of Representatives is all but certain to pose the biggest threat to Obama’s victory. On Monday a number of liberal critics of the deal said it did little to protect vulnerable industries or promote job creation. Some of the broadest support came from the farm sector. Other big industry groups were more positive. The National Association of Manufacturers applauded the pact, which the White House said would eliminate import duties of up to 59% on US machinery shipped to TPP partners.
U.S. Raw Steel Output
US raw steel output retreated 0.5 percent last week as mills operated at an ACUR of 72.2 percent. In the corresponding week last year mills operated at an ACUR of 77.4 percent. On the year, mills have produced approx. 68,000,000 tons at an ACUR of 72.5 percent. In the like period last year, mills produced approx. 74,000,000 tons at an ACUR of 78 percent.
Now for a little transparency on the commodities correction:
Despite a surprisingly large upward revision to second quarter GDP growth (I think it is an outright lie), weaker global economic conditions and the stronger dollar continue to restrain US economic activity. We are now projecting third quarter economic growth to come in at just 1.0 percent, with a widening trade deficit and slower rate of inventory accumulation accounting for much of the downshift in economic growth. Final demand should remain fairly solid, with final sales to domestic purchasers rising at a 3.3 percent pace, which is close to its recent trend…
September’s weaker than expected rise in non-farm employment and downward revisions to previously reported job growth have called into question the viability of the economic expansion (?) and likelihood that the Fed will raise interest rates during the latter part of 2015. Not only were the employment data weaker than expected, but several leading components also declined, including the proportion of industries adding jobs over the past three months and hours worked. Both suggest the job growth will slow further in coming months, casting a shadow on fourth quarter growth.
The deceleration in job growth follows several months of deteriorating conditions in the nation’s factory sector. The ISM manufacturing survey has fallen for three consecutive months, declining to 50.2 in September from August 2014 high of 58.1…the deterioration in the factory sector reflects the influence of slower global economic growth, the stronger dollar and weaker commodity prices.
Industries tied to the global economy such as export-oriented manufacturing, mining, energy extraction and agriculture are feeling the full brunt of slower global economic growth…Exports are expected to decline further in coming quarters. Much of the recent weakness has been in commodities and commodity type products, such as chemicals, steel and forest products. Exports of capital equipment, particularly related to mining, construction and agriculture, have also weakened considerably. All should weaken further…
The sudden deterioration in exports and the continued growth of imports has led to a buildup of inventories. Business inventories rose by $113.5 billion in the first quarter and by $112.8 billion during the second quarter. Typically a buildup of this magnitude is followed by a massive liquidation, resulting in a decline in business inventories.”
Wells Fargo Economics Group (monthly outlook for October 2015)
American Military Readiness
We have our weakest army since 1940, our Navy has not been this under-equipped since 1930 and Putin is bombing CIA backed Syrian rebels in that country. Iran is a world threat, Afghanistan is a mess, Iraq is a total mess since Obama pulled our troops, China, North Korea, Pakistan, Boko Haram in Africa and on and on. Where and when does the stupidity end? Does no one in Washington realize that the weakness we portray to the world is having now, and will continue to have, dire consequences?
Have a great weekend…. God bless America!
Buy American made products whenever you can, it’s good for you, good for your friends and neighbors and good for our country.
If you are hiring…try to hire a veteran…. they are loyal, disciplined, hardworking…and they deserve our support.
Remember these tidbits as the election cycle grinds on:
- Fast & Furious-Americans killed by guns supplied to the drug cartels…by the Department of Justice-Eric Holder presiding. The president was clueless. No one held accountable
- Benghazi: Four Americans killed in an assault described as the result of a viral video. This was proved to be a false narrative. This was in fact, a planned act of terror. The president was clueless. No one even knows where he was as this went down. No one held accountable
- “At this point, what difference does it make?” Hillary Clinton as Secretary of State
- The IRS targeting of conservative groups and individuals. No one held accountable, Lois Lerner is on paid vacation and has refused to testify. The president was clueless. No one held accountable
- Hillary using a private server for correspondence during her term as Secretary of State against the orders of the president. She thought “it would be more convenient…” Though the records were due when she left office, they were not submitted, subpoenas were issued, which she ignored for two years. Finally, she released 30,000 of some 60,000 alleged emails then she deleted the rest of the emails and will NOT turn over the server for investigation.