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Chicago Fed National Activity Index (CFNAI) Bounces Back Strongly in June

American Manufacturing Sector Graphic Concept. (Photo: AdobeStock)

The Chicago Fed National Activity Index (CFNAI) bounced back to +0.43 in June from –0.45 in May, fueled by a strength in production, specifically manufacturing. Industrial production rose 0.6% in June after falling 0.5% in May, fueled by a strong rebound in manufacturing output.

Two of the four broad categories of indicators that make up the index increased from May, and three of the four categories made positive contributions to the index in June. The index’s three-month moving average, CFNAI-MA3, edged up to +0.16 in June from +0.10 in May.

The CFNAI Diffusion Index, which is also a three-month moving average, was unchanged at +0.15 in June. Forty-five of the 85 individual indicators made positive contributions to the CFNAI in June, while 40 made negative contributions. Forty-five indicators improved from May to June, while 40 indicators did not. Of the indicators that improved, 12 made negative contributions.

Production-related indicators contributed +0.36 to the CFNAI in June, after making a –0.56 contribution in May. Manufacturing industrial production increased 0.8% in June after declining 1.0% in May.

Employment-related indicators contributed +0.08 to the CFNAI in June, down slightly from +0.11 in May. Nonfarm payrolls increased by 213,000 in June after rising by 244,000 in May.

Worth noting, the CFNAI was constructed using only data available as of July 19, 2018. There were data sets for 51 of the 85 indicators published. Estimates were used for unavailable data to construct the index.

July 23, 2018

The Chicago Fed National Activity Index (CFNAI)

Politics

Carter Page FISA Warrant Application Confirms Dossier Role, Circular Reporting

From left to right: Demoted FBI lawyer Lisa Page, her extramarital lover and reassigned former counterintelligence head Peter Strzok, fired former FBI director James Comey, and fired former FBI deputy director Andrew McCabe. (Photos: Reuters/FBI)

The Justice Department (DOJ) released the documents used to justify the FISA warrant application to spy against Carter Page, a former and peripheral campaign adviser to then-candidate Donald Trump.

The heavily-redacted documents confirm crucial details of the memo largely prepared by Rep. Devin Nunes, R-Calif., and other Republicans on the House Permanent Select Committee on Intelligence (HPSCI). That includes the allegation that the DOJ and Federal Bureau of Investigation (FBI) relied upon the infamous and discredited dossier put together by former MI6 British intelligence agent Christopher Steele.

“I said this could never happen. This is so bad that they should be looking at the judges who signed off on this stuff, not just the people who gave it,” said Andrew McCarthy, former assistant U.S. attorney for the Southern District of New York. “It is so bad it screams out at you.”

Worth noting, U.S. District Court Judge Rudolph Contreras, who presided over the case against former National Security Adviser Michael Flynn, had a personal relationship with Peter Strzok. The disgraced former head of the counterintelligence division was at the center of the pivot from the Clinton email probe to Russian collusion.

Judge Contreras recused himself without explanation, after the fact.

The dossier was funded by the Democratic National Committee (DNC) and the campaign for Hillary Clinton. But Obama Administration officials never told the FISA court that it was political opposition research.

The nonprofit Campaign Legal Center (CLC) has filed a complaint with the Federal Election Commission (FEC) alleging both the Clinton campaign and the DNC violated campaign finance law by failing to accurately disclose payments for the dossier. Fusion GPS, the shadowy smear firm hired by Clinton lawyer Marc E. Elias of Perkins Coie, hired Mr. Steele to author the dossier.

With the release of the FISA warrant application, there’s now no doubt that political opposition research was a major component used to justify the initial and subsequent renewals. The non-redacted sections of the released FISA documents do not indicate the dossier was ever verified.

Instead, the FBI claimed Mr. Steele, the former Russian desk head who was reportedly driven out of MI6, was “reliable” based on his previous work.

The documents were obtained as a result of a February 2018 Judicial Watch Freedom of Information Act (FOIA) lawsuit filed by Judicial Watch after the DOJ rejected a July 19, 2017, FOIA request. Judicial Watch President Tom Fitton called on President Trump to declassify the material.

“These documents are heavily redacted but seem to confirm the FBI and DOJ misled the courts in withholding the material information that Hillary Clinton’s campaign and the DNC were behind the ‘intelligence’ used to persuade the courts to approve the FISA warrants that targeted the Trump team,” Mr. Fitton said. “Given this corruption, President Trump should intervene and declassify the heavily redacted material.”

Rep. Adam Schiff, D-Calif., the Ranking Member of the House Intelligence Committee, had made public statements sourced in the dossier during the campaign, well before it was first published by BuzzFeed. Multiple sources tell PPD that Mr. Schiff, a notorious leaker, sought to hide the funding revelation from members of the committee.

Section 702 of the Foreign Intelligence Surveillance Act (FISA) allows intelligence agencies to collect information on foreign targets abroad. However, as PPD also previously reported, it has been “routinely” abused and misused to spy on domestic targets, including President Trump, his associates and other U.S. citizens.

The documents for the FISA warrant application also reveal that a September 2016 Yahoo News article written by Michael Isikoff was used to support the veracity of the allegations in the now-defunct dossier, though it was the very source of the article. That’s called circular reporting, and it’s a cardinal sin in the intelligence community.

London court records show that Steele briefed Yahoo News and other reporters in the fall of 2016 at the direction of Fusion GPS.

Bank records obtained by the HPSCI probe show Fusion GPS made payments to at least 3 journalists known for covering Russian collusion stories. Yahoo News is cited as one of the news outlets “briefed” on the Kremlin-sourced dossier.

Senators Chuck Grassley, R-Iowa, and Lindsey Graham, R-S.C., sent a a criminal referral to Mr. Rosenstein and FBI Director Christopher Wray to investigate Mr. Steele, citing potential violations of 18 U.S.C. § 1001, or making false statements to investigators particularly regarding the distribution of claims contained in the dossier.

July 22, 2018

The documents used to justify the FISA

Two Dozen Sentenced in Massive India-Based Phone Scam Targeting U.S. Citizens

Phone Scam Fraud Call Solicitation 3D graphic concept Illustration. (Photo: AdobeStock)

Two dozen defendants were sentenced for running a massive India-based phone scam defrauding thousands in the U.S. out of hundreds of millions of dollars.

Individuals from call centers in Ahmedabad, India, impersonated officials from the Internal Revenue Service (IRS) or the Citizenship and Immigration Services (USCIS) threatened U.S. victims with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government.

“The stiff sentences imposed this week represent the culmination of the first-ever large scale, multi-jurisdiction prosecution targeting the India call center scam industry,” said Attorney General Jeff Sessions. “This case represents one of the most significant victories to date in our continuing efforts to combat elder fraud and the victimization of the most vulnerable members of the U.S. public.”

While 3 conspirators were sentenced earlier this year for laundering proceeds for the conspiracy, 21 were sentenced this week in Houston. The Honorable David Hittner of the Southern District of Texas handed out terms of imprisonment up to 20 years.

“This type of fraud is sickening,” said U.S. Attorney Ryan Patrick of the Southern District of Texas. “However, after years of investigation and incredible hard work by multiple agents and attorneys, these con artists are finally headed to prison. Their cruel tactics preyed on some very vulnerable people, thereby stealing millions from them.”

Miteshkumar Patel, 42, of Illinois, was sentenced to serve 240 months in prison followed by another 3 years of supervised release on the charge of money laundering conspiracy. According to his plea agreement, Patel served as the manager of a Chicago-based crew of “runners” who liquidated and laundered the proceeds generated by the phone scam carried out at India-based call centers.

Individuals at the call centers used call scripts and lead lists to target U.S. victims with phone schemes, in which they impersonated U.S. government officials from the IRS and USCIS. After the victims transferred money to the callers under threat of imprisonment or deportation, a network of U.S.-based runners moved to quickly liquidate and launder proceeds through the use of anonymous stored value cards.

In addition to recruiting, training, and tasking runners in his crew, Patel also coordinated directly with the Indian side of the conspiracy about the operation of the scheme. Patel was held accountable for laundering between $9.5 and $25 million for the scheme.

“These sentences should send a strong message that we will follow the trail no matter how difficult and seek justice for those victimized by these types of transnational schemes,” U.S. Attorney Patrick added. “We will simply not stand by and allow criminals to use the names of legitimate government agencies to enrich themselves by victimizing others.”

Hardik Patel, 31, of Illinois, was sentenced to 188 months in prison followed by 3 years of supervised release on the charge of wire fraud conspiracy. Upon completion of his prison term, he will be deported back to India. According to his plea agreement, Patel was a co-owner and manager of an India-based call center involved in the conspiracy.

He managed the day-to-day operations of a call center, processed payments and did bookkeeping for the various call centers involved in the fraud scheme. One of the India-based co-defendants with whom Patel communicated about the scheme was Sagar “Shaggy” Thakar, a payment processor that Indian authorities arrested in April 2017 in connection with call center fraud.

After moving to the U.S. in 2015, Patel continued to promote the conspiracy by recruiting runners to liquidate fraud proceeds. Patel was held accountable for laundering between $3.5 and $9.5 million dollars for the scheme.

“Today’s sentences should serve as a strong deterrent to anyone considering taking part in similar scams, and I hope that they provide a sense of justice to the victims, as well,” said Homeland Security Investigations (HSI) Acting Executive Associate Director Derek N. Benner. “There is no safe haven from U.S. law enforcement.”

“HSI will continue to utilize our unique investigative mandate, in conjunction with our local, state, and federal partners, to attack and dismantle the criminal enterprises who would seek to manipulate U.S. institutions and taxpayers.”

Sunny Joshi, aka Sharad Ishwarlal Joshi and Sunny Mahashanker Joshi, 47, of Texas, was sentenced to serve 151 months in prison on the charge of money laundering conspiracy, and 120 months in prison on the charge of naturalization fraud to run concurrent. They will be followed by 3 years of supervised release.

According to his plea agreement, Joshi was a member of a Houston-based crew of runners that he co-managed with his brother, co-defendant Mike Joshi, aka Rajesh Bhatt. He communicated extensively with India-based co-defendants about the operations of the scheme, and was held accountable for laundering between $3.5 and $9.5 million.

Additionally, Judge Hittner entered an order revoking Joshi’s U.S. citizenship and requiring him to surrender his certificate of naturalization. Eighteen other defendants — viewable below — were also sentenced in Houston before Judge Hittner this week.

“The sentences imposed this week provide a clear deterrent to those who would seek to enrich themselves by extorting the most vulnerable in our society,” said DHS-OIG Special Agent in Charge Green. “These scammers should know that their actions carry real consequences, both for their victims and for themselves, and that there are dedicated agents and prosecutors who will go above and beyond to find them, identify them and hold them accountable for their crimes.”

Twenty-two of the defendants sentenced before Judge Hittner were held jointly and severally liable for restitution in the amount of $8,970,396, payable to identified victims. Additionally, the court entered individual preliminary orders of forfeiture against 21 defendants for assets that were seized in the case, and money judgments totaling over $72,942,300.

The indictment in this case also charged 32 India-based conspirators and five India-based call centers with general conspiracy, wire fraud conspiracy, and money laundering conspiracy. But these defendants have yet to be arraigned in this case.

The IRS implored Americans to remain vigilant and “wary of unsolicited telephone calls from individuals claiming to be IRS employees.”

“The sentences imposed on these defendants validate our efforts to bring to justice scammers who defraud taxpayers by impersonating employees of the Internal Revenue Service,” said Inspector General J. Russell George. “If any taxpayer believes they or someone they know is a victim of an IRS impersonation scam, they should report it to TIGTA at www.tigta.gov or by calling 1-800-366-4484.”

Attorney General Sessions vowed to continue to bring the full power of the DOJ down on those responsible for these fraud schemes.

“The transnational criminal ring of fraudsters and money launderers who conspired to bilk older Americans, legal immigrants and many others out of their life savings through their lies, threats and financial schemes must recognize that all resources at the Department’s disposal will be deployed to shut down these telefraud schemes, put those responsible in jail, and bring a measure of justice to the victims.”

Sentences before Judge Hittner this week:

Fahad Ali, 25, of Indiana, was sentenced to serve 108 months in prison followed by three years of supervised release on one count of money laundering conspiracy. Judge Hittner also recommended deportation upon completion of his sentence.
Montu Barot, 30, of Illinois, was sentenced to serve 60 months in prison followed by three years of supervised release on one count of conspiracy. Judge Hittner entered a stipulated judicial order to remove Barot to India at the conclusion of his sentence.
Rajesh Bhatt, aka Mike Joshi, 53, of Texas, was sentenced to serve 145 months in prison followed by three years of supervised release on one count of money laundering conspiracy. Judge Hittner entered a stipulated judicial order to remove Bhatt to India at the conclusion of his sentence.
Ashvinbhai Chaudhari, 28, of Texas, was sentenced to serve 87 months in prison followed by three years of supervised release on one count of money laundering conspiracy.
Jagdish Chaudhari, 39, of Alabama, was sentenced to serve 108 months in prison followed by three years of supervised release on one count of money laundering conspiracy. Judge Hittner entered a stipulated judicial order to remove Chaudhari to India at the conclusion of his sentence.
Rajesh Kumar, 39, of Arizona, was sentenced to serve 60 months in prison followed by three years of supervised release on one count of conspiracy. Judge Hittner recommended deportation to India following his prison sentence.
Jerry Norris, 47, of California, was sentenced to serve 60 months in prison followed by three years of supervised release on one count of conspiracy.
Nilesh Pandya, 54, of Texas, was sentenced to serve three years probation on one count of conspiracy.
Nilam Parikh, 46, of Alabama, was sentenced to serve 48 months in prison followed by three years of supervised release on one count of money laundering conspiracy.
Bharatkumar Patel, 43, of Illinois, was sentenced to serve 50 months in prison followed by three years of supervised release on one count of money laundering conspiracy. Judge Hittner entered a judicial order to remove Patel to India at the conclusion of his sentence.
Bhavesh Patel, 47, of Alabama, was sentenced to serve 121 months in prison followed by three years of supervised release on one count of money laundering conspiracy.
Dilipkumar A. Patel, 53, of California, was sentenced to serve 108 months in prison followed by three years of supervised release on one count of conspiracy. Judge Hittner entered a stipulated judicial order to remove Patel to India at the conclusion of his sentence.
Dilipkumar R. Patel, 39, of Florida, was sentenced to serve 52 months in prison followed by three years of supervised release on one count of conspiracy.
Harsh Patel, 28, of New Jersey, was sentenced to serve 82 months in prison followed by three years of supervised release on one count of money laundering conspiracy. Judge Hittner also recommended deportation upon completion of his sentence.
Nisarg Patel, 26, of New Jersey, was sentenced to serve 48 months in prison followed by three years of supervised release on one count of conspiracy. Judge Hittner recommended deportation to India following his prison sentence.
Praful Patel, 50, of Florida, was sentenced to serve 60 months in prison followed by three years of supervised release on one count of conspiracy.
Rajubhai Patel, 32, of Illinois, was sentenced to serve 151 months in prison followed by three years of supervised release on one count of money laundering conspiracy.
Viraj Patel, 33, of California, was sentenced to serve 165 months in prison followed by three years of supervised release on one count of money laundering conspiracy. Judge Hittner entered a stipulated judicial order to remove Patel to India at the conclusion of his sentence.

Previous sentences before Judge Hittner:

Asmitaben Patel, 34, of Illinois, was sentenced before Judge Hittner in the Southern District of Texas, Houston Division, on March 23. She was sentenced to serve 24 months in prison on the charge of conspiracy.
Dipakkumar Patel, 38, of Illinois, was sentenced before Judge Eleanor L. Ross in the Northern District of Georgia, Atlanta Division, on Feb. 14. Patel, who pleaded guilty to charges of conspiracy and passport fraud, was sentenced to serve a prison term of 51 months, to run concurrently. He was also ordered to pay restitution in the amount of $128,006.26.
Raman Patel, 82, of Arizona, was sentenced before Judge John Tuchi in the District of Arizona, Phoenix Division, on Jan. 29. In connection with his plea agreement, Raman Patel received a probationary sentence for his plea to conspiracy. He was also ordered to pay restitution in the amount of $76,314.38.

July 21, 2018

Two dozen defendants were sentenced for running

Opinion

America: Can Do

Remember the old expression, “having a ‘can do’ attitude”?

America has always been a “can do” nation. The first pioneers to the American continent came over here with little more than a box of tools and a pack of food and that attitude and built a nation of 13 colonies that eventually beat the most powerful nation in the world (at that time, England). They moved west in wagon trains with little more than that, and settled in lands that vermin couldn’t live on.

America grew strong with its ‘can do’ attitude.

Americans moved on to fight a Civil War and yet managed to live peacefully after their disagreements were settled. They amassed a huge industrial machine that fueled European prosperity, as well as our own.

When most of the world was bent on fighting in World War One, President Woodrow Wilson had the attitude that the world could live in peace, and worked toward that with the League of Nations. This eventually developed into an institution to help establish world peace and prosperity through the United Nations.

In England’s darkest hour, and the evil of Nazism was draped over the European continent, it was American supply and know-how that turned the tide of war. It was the American “can do” attitude that eventually led to us landing on the moon — still, the only country to have done so, and then begin to explore the cosmos.

When countries are in trouble, when disaster strikes, it’s America that comes to the world’s needs, with enormous amounts of food supply and charity from its own citizenry.

America.

And yet, there seems to be a malaise about America these days. A belief that somehow America stands for corruption and that the American way is not always the best way.

While that may be true for some nations, America’s prosperity comes mainly from it’s form of government, where people have an equal say and share in power through its various branches. Our separation of powers, which legally prevents any one institution from controlling power, still is unique in the world today.

It is this freedom we allow ourselves, and the capitalistic economy we developed, that is the basis for our historical success.

But not to hear the Democrats tell it.

They seem to think America isn’t all that great — that we couch our prosperity behind a wall of corruption. They believe that America can’t solve its problems without outside help, that the international community has better answers than we do to the issues at hand today.

Democrats turn to outdated and historically flawed socialistic ideas and economic models to solve mankind’s intrinsic problems of poverty, hunger and disease.

We can’t protect our own borders, so we allow massive illegal immigration. “It can’t be done!” is the mantra in Washington D.C. today. We can’t continue to expand our exploration of outer space, either. Barack Obama once told the head of NASA to reach out for and enlist the help of Muslims. He spoke to the rest the world in terms of apologies, rather than in terms of leadership.

Instead of telling world to follow our example of hard work and freedom for its peoples, Obama asked for their forgiveness again, in a recent speech in South Africa.

“This is not a just America” that we have built they yell, telling people that they are racist, sexist or phobic about illegal immigrants flooding our border states. This is a “can don’t” political party not a “can do” one, a charge they freely place on clearer-headed conservatives.

Harry Truman used to have a sign on his desk that said, “The Buck Stops Here”. He was a Democrat. But now they should have one that says, “The Buck is Trump’s Fault”.

Leadership, in order to be successful, needs to lead, not follow. Teamwork and diplomacy is all well and good, but teamwork can not succeed without a strong ethic and example, which America can provide. Sitting in a group and apologizing for your success simply weakens the group as a whole.

Our president has stood up and said, “Yes, we can close our borders — let’s try this”. Now Trump needs to focus our government on solving its problems by saying, “Yes we can — and here’s how,” not like the Democrats, who hold up legislation on the border wall and spend money everywhere else.

Democrats like to call the Republicans the Party of No, but when have they provided leadership? If we ask them for leadership, they are more than likely to create a committee to discuss it further, and then file a 2000-page report before they can move forward.

Leadership by consensus rarely succeeds. Congress should not ignore the will of the people, and do as THEY think is best. The Democrats view Americans as rubes and uneducated rednecks.

Well, it was the rube that built the factories and industries of the East, the redneck that civilized the West. An Ivy League degree is a fine accomplishment, but it is not the only measure of a man’s or woman’s worth, nor their ability. It doesn’t mean he or she always knows best.

Jimmy Carter had the same problem and comes from the same school of thought. During his Presidency we had the same malaise creep over the country. Being a patriot was a dirty word, and America was floundering in its world standing.

Even the then-Soviet Union sensed our weakness, and used the opportunity to move against Afghanistan.

What did we do? We boycotted the Olympics.

When a hostile nation took our embassy and invaded our soil, we discussed options, and launched a failed rescue mission. We allowed the legitimate leader of that nation to collapse and Islamic extremism to expand and become the threat it is today. President Obama expanded on that failed foreign policy, and it expanded again.

Now we are told to keep our borders open, and socialism is the savior to the American people instead of capitalism, which brought us here.

Impotence.

This coming fall, we need to focus on electing people who believe in a strong America, who can lead America back into that “can do” mentality. We need to vote into office not necessarily Republicans, but leaders who believe in the core platform of conservative thought.

Namely, less government, lower taxes, and a strong national defense, and family values like the privatization of schooling, and on a sense of self-reliance rather than entitlements.

That’s it. It’s not difficult to understand. Candidates running for office would win on that platform. You don’t need a fancy education, or a lengthy exposition of theories or theses.

Less government, lower taxes, strong national defense, family values.

Can do.

July 20, 2018

America has always been a “can do”

Elections

“He’s Gone Washington”: Club for Growth Targets Tester With TV Ad Buy

Senator Jon Tester, D-Mont., speaks to reporters on Capitol Hill in Washington, U.S., February 1, 2017. (Photo: Reuters)

Club for Growth Action Montana launched a $600,000 television ad buy against Senator Jon Tester, D-Mont., to highlight how Washington changed him. The ad, entitled “Say What You Mean” — which will run on broadcast, cable, and satellite TV across the state — focuses on him attacking his opponent for raising the national debt limit.

“In Montana, people say what they mean. But not Jon Tester,” the narrator says. “When Tester first ran for Senate he attacked raising the national debt limit.”

“But when he moved to Washington, Tester voted to raise the national debt limit 11 times and add trillions to the national debt.”

“No doubt, Sen. Tester will attempt to run from his liberal record in an effort to deceive voters, but voters deserve to know the truth,” CFG Action Montana President David McIntosh said. “Over his 12 years in Washington, Sen. Tester has abandoned Montana in favor of Washington’s insider politics.”

“Instead of forcing Congress to live within its means, Sen. Tester voted raise the national debt 11 times and sent Montana taxpayers the trillion dollar bill.”

While the Club for Growth has been both an ally and adversary to President Donald Trump, they share in the common goal to defeat Senator Tester. President Trump targeted the vulnerable incumbent Democrat at a rally in Great Falls in early July, saying voters “deserve a Senator who votes like he’s from Montana.”

The president visited the conservative state to support Matt Rosendale, the Republican nominee for U.S. Senate. The decision to put Mr. Tester on the chopping block came after he leveled unsubstantiated allegations against Admiral Ronny Jackson, MD, who withdrew as the nominee for Secretary of the Department of Veterans Affairs (VA) amid the attacks.

They eventually collapsed after the fact.

President Trump previously called on Senator Tester to resign, and in Montana he told voters that he “showed his true colors in his shameless attack” against Admiral Jackson.

“They could’ve ruined a lesser man.”

July 20, 2018

Club for Growth Action Montana launched a

Economy

Labor Productivity in 2017 Largely Outpaced 10-Year Averages

A collage graphic concept for industry and labor. (Photo: AdobeStock)

The U.S. Bureau of Labor Statistics reported labor productivity in 2017 rose 2.7% in wholesale trade and 2.8% in retail trade, easily outpacing their 10-year averages. From 2007 to 2017, labor productivity in wholesale trade and retail trade rose by just 1.1% and 2.0%, respectively.

However, food services and drinking places saw a 2.2% decline in 2017, compared to a smaller -0.2% dip during the same 10-year period.

Unit labor costs, which reflect the total labor costs required to produce a unit of output, rose in food services and drinking places and fell in wholesale trade and retail trade.

For wholesale trade in 2017, productivity, output, and hours worked all increased at a faster rate than in 2016. In retail trade, the growth in output continued to outpace the growth in hours worked in 2017, though the more narrow margin led to a smaller productivity increase than in 2016.

Productivity in food services and drinking places declined in 2017 due to hours worked increasing at a faster rate than output. In 2016, productivity increased in this industry group as a result of output growing at a faster rate than hours worked.

Productivity increased in 12 of the 16 3-digit NAICS industries studied in 2017, including 7 industries that saw productivity gains of at least 4.0%. Nonstore retailers had the largest increase in output, at 10.6%. Of the 3 industries with productivity declines, gasoline stations experienced the largest drop, at -3.2%.

Through most of the Great Recession, labor productivity lagged behind historical growth rates. Coming out of the recession and into the early quarters of the current expansion, productivity growth reached above-average gains before quickly fizzling out.

In the fourth quarter (4Q) of 2009, productivity growth actually caught up to the long-term historical trend, although it was still slightly behind the trend from the previous business cycle. After 2010, productivity growth slowed and remained substantially below that of earlier periods.

From the 4Q 2007 to 3Q 2016, labor productivity grew at an average annual rate of 1.1%, significantly lower than the 2.3% average growth rate from 1947 to 2007 or the 2.7% average rate from 2001 to 2007.

All three industry groups experienced a slowdown in productivity growth from 2007 to 2017. Productivity increased in 45 out of 49 4-digit industries from 1987 to 2007 compared to 33 industries from 2007 to 2017.

July 19, 2018

The BLS reported labor productivity in 2017

Economy

Philadelphia Fed Business Outlook Survey Beats Forecast in July

A manufacturing assembly line at the Heinz factory in Pittsburgh, Pennsylvania. (Photo: Courtesy of Heinz)

The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey gained 6 points to 25.7 in July, easily beating the consensus forecast. The forecast range was 18.0 to 24.5, with the consensus calling for a 22.0 reading.

Over 44% of the manufacturers reported increases in overall activity this month, while just 19% reported decreases.

The new orders index bounced back, gaining 14 points after falling 23 points in June. Nearly 46% of the firms reported an increase in orders, while just 14% reported declines. The current shipments index, however, fell 4 points. The firms reported, on balance, increases in unfilled orders and longer delivery times this month.

Firms continue to report higher employment, but increases were not as robust this month. Over 24% of the responding firms reported increases in employment this month, down from 34% last month. The current employment index and current average workweek fell 14 points and 11 points, respectively.

The manufacturers continued to report higher prices for both purchased inputs and their own manufactured goods, undoubtedly a result of tariffs. Price increases for purchased inputs were reported by 63% of the manufacturers this month, up from 54% last month. The index has now risen 30 points since January.

In fact, input costs saw their largest increases since July 2008.

The current prices received index, reflecting the manufacturers’ own prices, increased 3 points. Over 36% of the firms reported higher prices for their manufactured goods this month.

Summer Slowdown Less This Year

The vast majority of firms (61%) reported that seasonal factors were not significant. However, even though 36% said that they were, the percentage reporting a slowdown during the summer is less than the previous year.

Nearly 52% of the firms with seasonal patterns reported no difference in seasonal effects, 26% saw seasonal patterns as less important, and only 8% said they were more significant.

July 19, 2018

The Philadelphia Federal Reserve's Manufacturing Business Outlook Survey

Economy

Jobless Claims Fall to Lowest Level Since December 6, 1969

U.S. jobless claims graph on a tablet screen.

First-time jobless claims fell 8,000 to a seasonally adjusted 207,000, the lowest level since December 6, 1969 when it was 202,000. The 4-week moving average was 220,500, a decrease of 2,750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 223,000 to 223,250.

No state was triggered “on” the Extended Benefits program during the week ending June 30.

The advance seasonally adjusted insured unemployment rate was unchanged at 1.2% for the week ending July 7. The advance number for seasonally adjusted insured unemployment during the week ending July 7 was 1,751,000, an increase of 8,000.

The 4-week moving average was 1,735,750, an increase of 6,250 from the previous week’s revised average. But both measures are at the lowest levels since the 1970s.

The highest insured unemployment rates in the week ending June 30 were in New Jersey (2.2), Connecticut (2.1), Puerto Rico (2.1), the Virgin Islands (2.1), Alaska (2.0), Pennsylvania (2.0), Rhode Island (1.9), California (1.8), Illinois (1.5), and New York (1.5).

The largest increases in initial claims for the week ending July 7 were in New York (+15,130), Michigan (+9,274), Ohio (+3,038), Iowa (+2,310), and Pennsylvania (+2,004), while the largest decreases were in California (-5,387), New Jersey (-3,524), Massachusetts (-2,510), Connecticut (-2,011), and Kentucky (-1,598).

July 19, 2018

First-time jobless claims fell 8,000 to a

Polls

Rasmussen Reports Unveils Citizen-Sourced Public Polling Project

Rasmussen Reports on Wednesday unveiled the first-ever “citizen-sourced” public polling project ahead of the 2018 midterm elections. The Citizen-Sourced National Midterm Election Polling Project is a non-profit venture powered by Go-Fund-Me targeting U.S. Senate and gubernatorial races in up to 20 key battleground states.

“On November 8, 2016, millions across America were stunned by the outcome of the presidential elections. Many still are. Our readers were not surprised because we always told them the 2016 election was a close race,” Rasmussen Reports Board Member Ted Carroll said. “Then our polling nailed the exact Popular Vote margin between the two leading 2016 candidates while our research also correctly informed readers that issues, not media-fed controversies, would ultimately decide the election.”

It is the first time a daily national polling firm has ever offered ordinary Americans the chance to contribute to public opinion surveys. While subscribers and non-corporate donors exclusively fund public polling conducted by Big Data Poll for PPD, we do not track daily in non-presidential election cycles.

It comes as trust in public political polling and political news collapse to all-time lows.

“The 2016 presidential election wasn’t the first major polling blunder in U.S. politics,” Big Data Poll and PPD Election Model Director Rich Baris said. “But it does appear to be the one in which pollsters lost the public trust.”

Nearly 6 in 10 (57%) likely voters in the U.S. now say they do not trust political polls. That’s up from the last previous high of 55% and is being fueled by skepticism and distrust from significant majorities of Republicans and unaffiliated voters.

“If the polling industry wants to earn that trust back, it can’t keep the corporate media model.”

Contributions to the project will cover direct and indirect polling and reporting costs for up to 4 separate polling cycles. Rasmussen Reports said it will be solely responsible for all “polling matters including timing, questions, fielding, tabulations and reporting.”

Total contributions to the project will be capped to avoid raising funds that cannot be specifically used on polling and reporting costs.

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July 18, 2018

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Regional coordinator Charles Evans (4th L) picks up children from school to take them to an after-school program at South Los Angeles Learning Center in Los Angeles, California March 16, 2011. (Photo: Reuters)

Policy

Fake Poverty Data from the European Commission and New York Times

I’m thinking of creating a new, pithy way of describing leftists who lie about poverty. And there are plenty of them.

The United Nations.
The Organization for Economic Cooperation and Development.
The Equal Welfare Association.
Germany’s Institute of Labor Economics.
The Obama Administration.

Today, we identify some additional members who are eligible for this disreputable club.

And we’ll start with the European Commission.

Here’s a chart from a recent report that supposedly shows poverty rates in various European nations.

If you compare the “at-risk-of-poverty rate” for various nations, you’ll notice some very odd outcomes.

For instance, the tiny tax haven of Luxembourg is one of the world’s wealthiest nations, yet it supposedly has more poverty than Hungary. And super-rich Switzerland has more poverty than Slovakia. And oil-rich Norway has more poverty than the Czech Republic.

Are all those rich nations in Western Europe really suffering from higher poverty rates than some of the Eastern European countries still recovering from communist rule?

Of course not. The chart is based on a big, fat lie.

And I know it’s a lie because if you look in the glossary at the end of the long report, you’ll see that the bureaucrats openly admit that their so-called poverty chart has nothing to do with poverty and nothing to do with living standards (I’ve underlined the most important parts).

Interestingly, the bureaucrats in Brussels included a chart in the study revealing the level of inaccuracy for each country.

Here’s a look at the dishonest poverty rate (the blue diamond) compared to a measure of “severe material deprivation” that presumably does a better job of showing the real number of poor people (the red diamond).

By the way, I’m not a huge fan of the European Commission’s measure of “severe material deprivation” since it includes variables such as having a car, a color TV, and the money to take a one-week vacation.

But that’s a separate story.

Let’s look at other new members of our club.

An Eduardo Porter column in the New York Times also used the dishonest definition of poverty.

How can it be that the United States spends so much money fighting poverty and still suffers one of the highest child poverty rates among advanced nations? One in five American children is poor by the count of LIS, a data archive tracking well-being and deprivation around the world. …the United States tolerated more child poverty in 2012 than 30 of the 35 countries in the Organization for Economic Cooperation and Development, a grouping of advanced industrialized nations. The percentage of children who are poor is more than three times as high in the United States as it is in Norway or the Netherlands. America has a larger proportion of poor children than Russia.

And here’s a chart from the article that definitely makes the United States look bad.

But, unless you read the column carefully, you would have missed this all-important detail.

…international standards that set the poverty line at one-half the income of families on the middle rung of the income ladder.

In other words, everything in the article, and all the numbers in the chart, have nothing to do with actual poverty. Instead, we’re simply looking at an indirect measure of income distribution.

And the United States is made to look bad because our median income is generally much higher than it is in other nations.

How absurd.

You’ll think I’m joking, but you can dramatically reduce “poverty,” based on this dishonest definition, if you randomly kill rich people.

Let’s conclude by looking at the U.K.-based Guardian‘s article about supposed poverty in Hong Kong.

A record number of Hong Kong residents live in poverty, with one fifth of the population falling below the poverty line despite economic growth, according to new government figures. The number of people living below the poverty line rose to 1.35 million in 2016, about 20% of the city’s population. The number is the highest number of poor since the government began publishing statistics in 2009. Despite opulent wealth, Hong Kong is a deeply unequal society. …The number of poor rose despite the government raising the poverty line last year. For single person households it is set at HK$4,000 (£388). It is HK$9,000 (£873) for a two person home and HK$15,000 (£1,455) for a family of three.

There’s a small problem and big problem with this article. The small problem is that it states that the number of poor people increased “despite” an increase in the poverty line.

Huh?!?

If the government raises the threshold, of course it will seem like more people are poor. The article should replace “despite” with “because.”

Tom Worstall, writing for CapX, explains the big problem in the article.

One of the great injustices of our age is, as The Guardian reported…, that 20 per cent of the people in Hong Kong, one of the richest places on the planet, live in poverty. …The Guardian [is] waxing indignant over things it doesn’t understand. …there’s an important underlying point: inequality – not poverty – is being measured here. The international definition of poverty is less than $1.90 a day. There’s no one in Hong Kong on this at all, therefore there’s no poverty. …we’re told that the poverty line in Hong Kong is HK $4,000 per month (roughly £380) for an individual which certainly doesn’t seem like much. Yet when we plug that into a comparison of global incomes we find that, accounting for price differences across geography, it’s firmly in the top fifth of all global incomes. In other words, the poorest 20 per cent in Hong Kong are still find themselves in the richest 20 per cent of all humans.

Given the praise I’ve heaped on Hong Kong, I also can’t resist sharing this excerpt even though it’s a separate topic.

As Hong Kong so vividly demonstrates, the…economy in which the poverty line is defined as being rather rich by global standards must have something going for it. According to the World Bank’s figures, back in 1960 Hong Kong was at around the average level of income for the planet, with GDP per capita at a little over $400 (in 1960 dollars). Today the figure is slightly over $40,000 per head while the global average has only struggled up to $10,000 or so. An over performance by a factor of four isn’t that bad over half a century, is it?

Amen.

If we actually care about reducing genuine poverty, there’s no substitute for the miracle of compounding growth.

Which is why our friends on the left, if they actually cared about poor people (and I think most of them genuinely do care), should focus on growth rather than being fixated on redistribution.

July 18, 2018

The European Commission (EC) and The New

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