A retail sales shopper in the U.S. (Photo: Reuters)
The Commerce Department said on Friday U.S. retail sales in April increased 1.3%, which is the biggest gain posted since March 2015 (in a year). Retail sales for the prior month of March were revised up to show a slightly less decline of 0.3% instead of the initially reported 0.4%.
Behind the numbers, Americans increased their purchases of automobiles and a wide range of other goods, indicating the economy may be regaining momentum after growth almost stalled in the first quarter. Still, the U.S. economy cannot thrive and those working in it cannot prosper on an abysmal average of 2% growth in the gross domestic product.
Excluding automobiles, gasoline, building materials and food services, retail sales increased by just 0.9% last month after an upwardly revised 0.2% gain in March. These so-called core retail sales actually correspond most closely with the consumer spending component of gross domestic product, a gut-check reminding analysts not to be overly too optimistic going forward.
But the report did slightly top the median forecast, as economists polled by Reuters had expected retail sales to gain 0.8% and core retail sales to increase 0.3% last month. The economy expanded at just 1.4% in the fourth quarter, weighted down by stagnant wages.
In April, auto sales rose 3.2%, which is the largest increase since March 2015 after falling 3.2% in March. Receipts at service stations increased 2.2%, largely the result of recent increases in gasoline prices.
Receipts at clothing stores gained 1.0%, which is the largest increase since May 2015. Online retail sales, an increasingly larger share of consumerism, jumped 2.1%. That’s the single biggest monthly gain since June 2014. Electronics and appliance outlets saw increases of 0.5%, while receipts at sporting goods and hobby stores rose 0.2%. Sales at restaurants and bars rose 0.3%.
However, receipts at building materials and garden equipment stores fell 1.0% last month, representing the largest decline since August.
The Producer Price Index (PPI) reported by the Labor Department Bureau of Labor Statistics.r
The Labor Department reported on Friday inflation, as measured by the producer price index (PPI) gained slightly 0.2% in April after falling 0.1% in March. However, in the 12 months through April, the PPI was flat after falling 0.1% in March through the same time period.
Economists polled by Reuters had forecast the PPI increasing by 0.3% last month and 0.2% from a year ago.
Inflation continues to be weighed down by the impact of the dollar’s relative gains against main U.S. trading partners and oil prices precipitously falling. The dollar has this year dropped 2.5 percent on a trade-weighted basis and oil has bounced off multi-year lows.
Last month, energy prices put on a gain of just 0.2% after increasing 1.8% in March. Wholesale food prices fell 0.3% following a 0.9% decline in March. Wholesale chicken eggs tanked 33.9 percent in April. Prices for services inched up 0.1% after falling 0.2% in March.
The so-called core PPI–or, the gauge of producer prices excluding food, energy and trade services–increased 0.3% last month after remaining flat in March. The core was up 0.9% in the 12 months through April after a similar increase in March.
[brid video=”37618″ player=”2077″ title=”Trump Reacts to Meeting with Speaker Ryan Uniting the GOP”]
May. 12, 2016 – 11:55 – Donald Trump reacted to his meeting with Speaker Paul Ryan, R-Wis., on “Hannity” Thursday and discussed the effort to unite the GOP before November. Mr. Trump met with Speaker Ryan on Thursday in D.C. to discuss party unity. While Mr. Ryan did not offer an endorsement as of yet, he did say that the meeting was very positive and took a big step in the right direction toward unification against Mrs. Clinton.
The presumptive Republican nominee also spoke about potential vice presidential nominees, his stance on the minimum wage, tax cuts and a Muslim ban.
[brid video=”37619″ player=”2077″ title=”O’Reilly The Real Story Behind Trump Meeting with Ryan”]
May. 12, 2016 – 2:34 – Bill O’Reilly, host of ‘”he O’Reilly Factor” on Fox News, said during his Talking Points memo on 5/12 that he fully expects the party to unify behind Donald Trump because the alternative is Hillary Clinton.
Mr. Trump met with House Speaker Paul Ryan, R-Wis., on Thursday in D.C. to discuss party unity. While Mr. Ryan did not offer an endorsement as of yet, he did say that the meeting was very positive and took a big step in the right direction toward unification against Mrs. Clinton.
ObamaCare, Barack Obama’s signature healthcare law overhaul, represented in graphic image.
A federal judge on Thursday ruled in favor of House Republicans in a lawsuit against the Obama administration challenging the legality of payments to insurers under ObamaCare. U.S. District Judge Rosemary Collyer ruled the controversial payments to insurers, which were meant to reduce co-payments for lower-income people, were unconstitutional.
The ruling Thursday marks a defeat for the Obama administration and a win for House Republicans. However, Judge Collyer put the decision on hold pending appeal.
“Today’s ruling by the D.C. federal court is an important step toward restoring the separation of powers and stopping President Obama’s power grab. The Constitution is very clear: it is Congress’ job to write our laws and it is the President’s duty to enforce them,” House Judiciary Committee Chairman Bob Goodlatte, R-Va., said in a statement.
The case surrounds a $175 million program authorizing payments to insurers that Republicans argued stepped on the power of the purse granted solely to Congress. These spending provisions were never appropriated by Congress. The House argued that Congress never specifically appropriated those funds and, in fact, denied the administration when they requested it.
Yet, the administration is spending the money anyway. The White House had previously described the case as a “partisan attack” and predicted it would be dismissed. However, on the central question of whether the money could be distributed anyway under another program, Collyer’s opinion was clear.
“It cannot.”
“None of the Secretaries’ extra-textual arguments – whether based on economics, ‘unintended’ results, or legislative history – is persuasive,” she wrote. “The Court will enter judgment in favor of the House of Representatives and enjoin the use of unappropriated monies to fund reimbursements due to insurers” under that section.
Collyer said the law is “clear,” and money was not allocated for that program.
She then said she would stay the injunction, giving the administration a chance to appeal. Collyer, with the U.S. District Court for the District of Columbia, is a George W. Bush appointee nominated in 2002.
The administration is expected to appeal Thursday’s ruling to the U.S. Court of Appeals for the District of Columbia Circuit.
President Ronald Reagan, left, the conservative standard-bearer with deep libertarian notes, and President Barack Obama, right, who wants to be the liberal big government standard-bearer, with deep modern liberal notes, which Reagan said resembles fascism.
Among Republicans and conservatives, Ronald Reagan is widely revered as a great President. From their perspective, he was the candidate who actually made America great again.
Fans of the Gipper tell us the economy rebounded, inflation was tamed, incomes rose, unemployment fell, and the Evil Empire was defeated. What’s not to love?
That’s an impressive list of accomplishments, but is it accurate? Did Reagan and his policies produce good results, or has history created a misleading perspective (just as people for many decades credited Franklin Roosevelt for ending the Great Depression when we now know that FDR’s policies actually lengthened and deepened the downturn)?
Some libertarians are skeptics, arguing that Reagan’s rhetoric about reining in big government was much better than his actual record.
So let’s look at what actually happened in the 1980s.
The place to start, if we want neutral and unbiased data, is Economic Freedom of the World. Annual data for the 1980s isn’t available, but the every-five-year data allows us to see that economic liberty did increase between 1980 and 1990.
By the way, a couple of caveats would be helpful at this point. Reagan entered office in January 1981 and left office in January 1989, so there’s not a perfect overlap between the EFW data and the Reagan years. Also, the EFW data measures changes in a nation’s economic liberty and it silent on whether a president (or the legislative branch) deserves credit or blame.
Now let’s look at the specific components to see the potential impact of Reaganomics on important variables such as fiscal policy, rule of law and property rights, trade policy, regulatory policy, and monetary policy.
I’ve created a table from the data on page 188 of the latest Economic Freedom of the World. As you can see, there was a substantial improvement in fiscal policy, a modest improvement in monetary policy, no change in regulation, no change in rule of law and property rights, and a small drop in trade.
And if you then dig into the EFWexcel file and look at the specific variables that are used to create these five scores, you’ll get more details.
Monetary policy improved for the obvious reason that the big drop in inflation meant a big increase in the “inflation” score. And the trade score dipped mostly because of an erosion in score for “tariffs.”
Now for my subjective assessment. I think Reagan was even better than shown by the EFW data. Here are three reasons.
The overall burden of government spending only fell by a small amount, but that number masks the fact that domestic spending was reduced significantly as a share of GDP during the Reagan years. That decrease was somewhat offset by a buildup of defense spending, but you can argue that the subsequent collapse of the Soviet Union meant this was a rare instance of government outlays actually generating a positive rate of return.
Reagan’s approach to monetary policy rarely gets the credit it deserves. By supporting a tough anti-inflation policy, he made it possible for the Federal Reserve to restore price stability. It’s very rare for a politician to allow some short-run pain (especially political pain) to achieve long-run gain for the country. And, to be fair, some of the credit goes to Jimmy Carter (though he also deserves blame for letting the inflation genie out of the bottle in the first place).
On trade policy, Reagan’s legacy is much better than indicated by the EFW scores. During his tenure, the NAFTA and GATT/WTO trade liberalization negotiations began and gained considerable steam. Yes, the implementation occurred later (with both the first President Bush and President Clinton deserving credit for following through), but we never would have reached that stage without Reagan’s vision of expanded trade and rejection of the protectionist philosophy.
Last but not least, let’s look at what Reagan’s policies meant for ordinary people. Did more economic liberty lead to better lives?
The answer is yes. The poisonous hidden tax of inflation largely disappeared. The unemployment rate fell. Labor force participation increased (in marked contrast with Obama). And there was a big increase in income for average Americans (again, in sharp contrast with Obama).
No wonder, when presented with a hypothetical matchup, the American people said they would elect Reagan over Obama in a landslide.
P.S. Critics of Reaganomics, including some on the right, inevitably raise the issue of deficits and debt and assert that Reagan failed. I think red ink is the wrong measure, but even for those who fixate on that variable, it’s worth noting that deficits were relatively small by the time Reagan left office and the Congressional Budget Office predicted they would continue falling if his policies were maintained. Moreover, the 1980-1982 double-dip recession was the reason red ink expanded so much during the early Reagan years, and that was primarily the inevitable consequence of the reckless monetary policy of the 1970s.
P.P.S. For Reagan humor, click here, here, and here.
P.P.P.S. If you want to be inspired, click here and here to see two short clips of Reagan in action. And at the bottom of this post, there’s a great video of Reagan embracing libertarianism.
House Speaker Paul Ryan, R-Wis., left, holds a news conference on Capitol Hill on March 17, 2016. Republican presidential candidate Donald Trump delivers a foreign policy speech at the Mayflower Hotel in D.C. on Wednesday April 27, 2016. (Photo: Reuters/Brendan Smialowski/AFP/Getty Images)
“No modern precedent exists for the revival of a party so badly defeated, so intensely discredited, and so essentially split as the Republican Party is today.”
Taken from “The Party That Lost Its Head” by Bruce Chapman and George Gilder, this excerpt, about Barry Goldwater’s defeat in 1964, led Thursday’s column by E.J. Dionne of The Washington Post.
Dionne is warning what could happen if the GOP perpetrates the political atrocity of nominating Donald Trump.
For weeks now, the Post’s editorial page has sermonized about the “moral” obligation of all righteous Republicans to repudiate Trump.
The Post’s solicitude for the well-being of the Republican Party is the stuff of legend. Yet it is a bit jarring to see these champions of abortion on demand, same-sex marriage, and visitation rights for cross-dressers in the girls’ room, standing in a pulpit lecturing on morality.
Yet, there was something off about that Chapman-Gilder quote.
First, both were members of the Harvard-based, Rockefeller-backed, liberal Ripon Society. Second, their prognosis of the party’s future proved to be spectacularly wrong.
The year, 1966, their book on the headless GOP appeared, to press hosannas, Richard Nixon led the party to its greatest off-year victory since 1946, adding 47 new seats in the House.
Two years later, Nixon won the presidency, inaugurating an era in which Republicans won five out of six presidential contests, two by 49-state landslides.
Out of Goldwater’s defeat came the New Majority and Reagan Revolution. And Chapman and Gilder moved rightward to serve with distinction in that revolution.
The prodigal sons were welcomed home, and Gilder would recant:
“The far Right — the same men I dismissed as extremists in my youth — turned out to know far more than I did. At least the ‘right-wing extremists,’ as I confidently called them, were right on almost every major policy issue from welfare to Vietnam to Keynesian economics and defense…”
While the Goldwater campaign, as an insurgency of outsiders, bears comparison with Trump’s, in other ways it does not.
Goldwater never compiled anything near the vote that Trump did. At this point in 1964, Goldwater was behind Johnson 79-18 in the Gallup poll. Trump is behind Hillary Clinton by single digits. New polls have him running even in Ohio, Florida and Pennsylvania.
Now, consider the issues comparison with 1964.
In July 1964, Johnson signed the popular Civil Rights Act that Goldwater had opposed. The GOP Convention in San Francisco revealed a deeply divided party, subject to the charge, validated by the rule-or-ruin Rockefeller-Romney faction, that it was receptive to right-wing radicals.
Lyndon Johnson’s decision to bomb North Vietnam after the Gulf of Tonkin incident made him a war leader, and Americans rally to presidents in a time of war.
In 2016, however, Trump holds a fistful of face cards. After eight years of President Obama, he is the candidate of change in 2016, and Clinton is the candidate of same.
Trump may bring more excitement than some folks can handle.
But Clinton has become a crashing bore, until she gets agitated, and then the voice rises to where she sounds like the siren on the hook-and-ladder in “Chicago Fire.”
Other than that she would be the first woman president, what is there about her or her agenda that has popular appeal? That lack of appeal explains why her crowds are a fraction of Bernie Sanders’.
The Clinton of 2016 is not the Clinton of 2008.
As for the issues dividing Trump and Speaker Paul Ryan, Trump appears to have won the argument, if the debate is decided by voter preferences rather than Beltway preferences.
Trump’s denunciation of NAFTA and other “free-trade” deals Ryan supports is echoed by Sanders, who opposed those deals when they were up for a vote. Hillary Clinton no longer rhapsodizes over husband Bill’s NAFTA, and signals she will not support Obama’s Trans-Pacific Partnership in a lame-duck session.
Ryan professes to be a man of principle. Why does he not then stand by his principles, as Goldwater did, and bring up TPP for a vote?
Is Paul Ryan’s “immigration reform” package as popular inside his party as Trump’s tough line? It would seem not. The longer the primaries went on, the closer the other GOP candidates moved toward Trump. And if Ryan believes in it on principle, why not bring it up?
Ryan voted for the Iraq War that Trump calls a disaster. The people seem now to agree with Trump that the war was misconceived.
Thursday’s Post reported that, five years ago, Ryan stood on the House floor to declare, “This is our defining moment.”
And what was Ryan’s defining moment?
“On that day in 2011,” said the Post, “the House’s new GOP majority approved Ryan’s budget plan — which …called for cuts in a government program that voters knew and loved: Medicare.
“Ryan … wanted eventually to turn the massive health-benefit program over to private insurers.”
Come to think of it, Barry Goldwater wanted to turn Social Security over to private enterprise. How did that one work out?
Patrick J. Buchanan is the author of the new book “The Greatest Comeback: How Richard Nixon Rose From Defeat to Create the New Majority.”
The latest import prices and export prices, including data and reports. (Photo: REUTERS)
The Labor Department said Thursday that import prices in April rose for a second straight month to 0.3%, missing the median forecast for an increase of 0.5%. The increase in inflation comes after March’s previously reported 0.2% gain.
The report also showed export prices increased 0.5 percent in April, the largest rise since May 2015, after being flat in March. Export prices were down 5.0 percent from a year ago.
Excluding petroleum, import prices increased slightly by 0.1%, the first gain since March 2014. Food import prices gained 1.3% last month, which is the largest gain since March 2014. Prices for imported industrial supplies and materials excluding petroleum increased by 0.4%.
Prices for imported capital goods fell 0.1% and the cost of imported automobiles ticked up 0.1%. Prices for imported consumer goods excluding autos fell 0.3%.
SAN FRANCISCO, CA – MAY 30: A job seeker holds a pamphlet during a job and career fair at City College of San Francisco southeast campus on May 30, 2013 in San Francisco, California. Hundreds of job seekers attended a career fair hosted by the San Francisco Southeast Community Facility Commission. (Photo by Justin Sullivan/Getty Images)
The Labor Department said Thursday the weekly jobless claims report showed an increase of 20,000 applications to 294,000 for the week ending May 7. This is the highest level for initial claims since February 28, 2015 when it was 310,000.
While this marks 62 consecutive weeks of initial claims below 300,000, which is the longest streak since 1973, the number came in higher than the estimate for 270,000 and is the biggest jump in nine months.
A Labor Department analyst said there were no special factors impacting this week’s initial claims and no state was triggered “on” the Extended Benefits program during the week ending April 23.
The four-week moving average–which is widely considered a better gauge, as it irons-out volatility–was 268,250, an increase of 10,250 from the previous week’s unrevised average of 258,000. The report is the latest string of disappointing economic news, which only until recently seems to exclude the labor market. The Labor Department reported last week that the U.S. economy added just 160,000 jobs, far lower than estimates for more than 200,000.
Labor force participation and population-to-employment ratios also decreased.
The highest insured unemployment rates in the week ending April 23 were in Alaska (3.7), Wyoming (2.9), New Jersey (2.5), Puerto Rico (2.5), West Virginia (2.5), California (2.4), Connecticut (2.4), Rhode Island (2.4), Massachusetts (2.3), and Pennsylvania (2.3).
The largest increases in initial claims for the week ending April 30 were in Michigan (+4,003), Ohio (+3,524), New York (+2,868), Kansas (+2,532), and Missouri (+1,551), while the largest decreases were in Massachusetts (-4,887), Illinois (- 4,477), California (-3,927), Rhode Island (-1,940), and Connecticut (-1,934).
Florida Rep. Alan Grayson, D-Fla., left, and Senate Minority Leader Harry Reid, D-Nev., right. (Photos: Getty Images)
Fireworks erupted on Wednesday between Rep. Alan Grayson, D-Fla., and Senate Minority Leader Harry Reid (D-Nev.) over ethics charges against Grayson and his bid for the Senate. The exchange occurred when outgoing Sen. Reid attended the weekly meeting of the Congressional Progressive Caucus (CPC) as a guest and Rep. Grayson jumped to the attack. He slammed Reid’s repeated past calls for the Florida Democrat to resign over allegations that he violated House rules by running hedge funds through his congressional office.
“Shame on you. It’s not true,” Grayson said, according to sources in the room.
“It is true, and I want you to lose,” Sen. Reid bluntly responded.
Rep. Keith Ellison, D-Minn., the leader of the CPC, jumped in to stop Rep. Grayson.
“Why are you doing that?” Rep. Ellison asked, according to sources in the room who spoke to The Hill. “This is so stupid.”
A second source claimed other CPC members backed Ellison’s stand.
“All the members were appalled” by Rep. Grayson’s behavior, the source said. “It was embarrassing for him and embarrassing for us that he behaved that way.”
Grayson, a known far left radical liberal, who once took to the House floor to say the Republican health care plan is to let people die, is in a primary battle with the more moderate Rep. Patrick Murphy, D-Fla., in the race to replace Florida Republican Sen. Marco Rubio. The freshman senator promised not to run for reelection and the White House, leaving it an open race in the Sunshine State.
Reid has endorsed Murphy in the contest.
Reid’s office issued a statement after the meeting confirming the confrontation, saying the Democratic leader “was honored” to address the CPC but that Grayson “decided to be disruptive, to the embarrassment of his fellow colleagues.”
“Senator Reid took the opportunity to express his low opinion of Congressman Grayson to his face and remind him that the reason Senator Reid has said that Grayson is under ethics investigation and appears to be running a Cayman Islands hedge fund from his Congressional office in order to line his own pockets is because these things are true, as established by seventy-four pages worth of evidence from the Congressional Ethics Committee,” the statement said.
Grayson — who has dismissed the ethics complaint as “frivolous” and “politically motivated” — defended his conduct at the meeting, saying his motive was “very simple.”
“I wanted to find out why Harry Reid lied about me a couple of months ago, when he smeared me. … I wanted to try to get to the bottom of it,” Rep. Grayson told reporters. “What he said was profoundly untrue, and even allowing for the fact that I am the anti-establishment candidate in this race, it was a very low blow.”
Grayson said he repeatedly pressed Reid to produce evidence that the ethics complaint has merit, but Reid couldn’t do it.
“When you say something bad about somebody you ought to have some basis for saying it. And he had nothing,” Grayson said. “I asked him easily, easily three or four times — maybe more — ‘What’s the basis for saying that? What’s your evidence?’ And all he could come up with is, ‘I want you to lose.’ And that is deeply disturbing. I mean, he’s a smear-monger.”
The Florida Senate race is rated a Toss Up on the PPD Senate Election Projection Model. The most accurate election forecast model on the Internet in 2014 will update its ratings after the party’s hold their primary contests on August 30.
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