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Sardina-Switzerland-Secessionists

Two men from Sardinia want to liberate their island from Italian rule and be adopted by someplace else — Switzerland. (PHOTO: Moment Open/Getty Images)

What’s the best country in the world? My emotional response is that the United States belongs in the top spot. But a more dispassionate analysis suggests that Switzerland is more deserving of the honor.

summary economic freedom ratings 2012It has the 4th-freest economy according to the most recent rankings from Economic Freedom of the World, eight spots above the United States. And it is ranked #2 in the Human Freedom Index, 18 spots higher than America. There are several specific reasons why Switzerland is a good role model.

Perhaps most important, the Swiss people are eminently sensible, as seen by their votes in favor of a spending cap and against class-warfare taxation, minimum-wage mandates, single-payer healthcare, and the death tax.

I’m not sure I would trust my fellow Americans to show similarly sound judgement. So, it’s surely true that there are lots of reasons to admire Switzerland. Indeed, it’s such an attractive country that many people in Sardinia want to secede from Italy and have their island become a Swiss canton.

Here are some passages from a report in the Wall Street Journal.

“In Sardinia, people want to be Swiss.” Welcome to “Canton Marittimo,” or “Canton of the Sea,” a bid by Mr. Caruso, a 51-year-old dentist from Sardinia, and his comrade Enrico Napoleone, a car dealer there, to liberate Sardinia from Italy and tether it to Switzerland. …With a population of 1.5 million, the island, which lies between Italy and Spain, is today home to more than 10 parties calling for secession from Rome, emphasizing a culture, dialect, and history distinct from Italy’s mainland. …Mr. Caruso says…“Switzerland is the ideal nation to help us secure our culture and traditions.” … “Most of the local population would go for it, starting tomorrow,” said Matteo Colaone, a spokesman for Domà Nunch, a separatist group in the Italian regions surrounding Milan.

And what do the Swiss think about this idea? At least one lawmaker likes the idea of adding cantons, though the government’s official position is not very welcoming.

In 2010, a member of Swiss parliament named Dominique Baettig proposed amending the constitution to aid regions in neighboring countries that want to become new cantons. Switzerland’s executive branch swiftly condemned it as “an unfriendly political act.” …There is little evidence the Swiss would want to adopt a rocky island that has many more sheep than people and per-capita economic output just one fourth that of Switzerland’s.

Here’s a video report on the topic from the WSJ.

[brid video=”15169″ player=”1929″ title=”Can Sardinia Become Part of Switzerland”]

In any event, it’s easy to understand why Sardinians are anxious to leave Italy and become part of Switzerland. Here are some excerpts from a story in the U.K.-based Guardian.

“We think of Switzerland as a good teacher who could lead us on a path of excellence.” As the 27th canton, Sardinia, so goes the argument, would bring the Swiss its miles of stunning coastline and untapped economic potential. Sardinia could retain considerable autonomy, while also reaping the benefits of direct democracy, administrative efficiency and economic wealth.

Whereas staying in Italy means endless statism.

…their frustrations with inefficient public spending, complex layers of decision-making and intimidating bureaucracy can be heard throughout the country. …being a small businessman in Italy was “a continuous battle”. “It is fighting every day with a problem that the administration, the bureaucracy, creates instead of solves,” he said.

And while the Swiss government doesn’t seem overly excited about adopting Sardinia, ordinary Swiss citizens seem to like the idea.

An online poll of 4,000 people asking, in German, “should we accept Sardinia?” produced a 93% yes vote.

I suspect that an actual referendum in Switzerland wouldn’t be that lopsided, and the final result would probably depend on whether Swiss voters thought Sardinians were simply seeking good policy or whether they were looking for big handouts (Switzerland does have some redistribution from rich cantons to those with more modest incomes).

The bottom line is that there’s scholarly evidence suggesting that supporters of decentralization, self-determination, and limited government should favor the ability of regions to either declare independence or choose to join neighboring countries (assuming there’s a mutual desire for union).

That why I think secession or radical decentralization is/was the right approach inUkraine, Belgium, and Scotland.

And as Walter Williams points out, secession can be peaceful, such as when Norway left Sweden early last century.

So I hope Sardinia moves forward.

Yes, it would be best for them to become part of Switzerland (and there already isan Italian-speaking canton). But even if the Swiss ultimately aren’t interested, the Sardinians at least would have a chance to escape Italy’s dysfunctional economic policies if they became independent.

P.S. The seven villages of Liechtenstein have the right to secede.

P.P.S. On a lighter note, here’s what would happen if the American right and left decided to secede from each other.

P.P.S. In our final postscript, let’s look at some fresh data about Switzerland.

Check out this chart (h/t: Constantin Gurdgiev) looking at how growth rates have changed in various European nations. As you can see, the 2002-2014 period has been grim for all nations compared to the years between 1980-2001. But Switzerland has had the smallest decline.

Growth-Gap-Chart-GDP-by-Nation-2002-2014-vs-1980-2001

Annualized rate of GDP growth 2002-2014 vs 1980-2001.

By the way, the left is always arguing that high tax burdens are necessary to help the poor. But as you can see from this chart (h/t: Fabian Wallen), every single income group is better off in low-tax Switzerland than high-tax Sweden.

Income-Sweden-vs-Switzerland

2013 income comparison, Sweden vs. Switzerland.

In other words, big government is bad news for everyone (other than insiders), but it’s especially bad for poor people. Bono realizes that capitalism is the right model for upward mobility. Now let’s hope Pope Francis learns the same lesson.

[mybooktable book=”global-tax-revolution-the-rise-of-tax-competition-and-the-battle-to-defend-it” display=”summary” buybutton_shadowbox=”true”]

When looking at the economic freedom data,

Trump Dominates Hillary on Economy, Jobs and Immigration

Donald-Trump-Hillary-Clinton-Getty

Donald Trump visits Turnberry Golf Club, after its $10 Million refurbishment, June 8, 2015, in Turnberry, Scotland. | Hillary Clinton speaks at the National Association of Latino Elected and Appointed Officials’ (NALEO) 32nd Annual Conference at the in Las Vegas, June 18, 2015. (PHOTO: GETTY)

Republican frontrunner Donald Trump is absolutely dominating Democratic frontrunner Hillary Clinton on the top issue for Election 2016 voters–the economy. According to a new poll conducted by Rasmussen Reports, Trump holds a double-digit lead in voter trust on the economy, immigration and is slightly ahead in national security.

By a a 50% to 38% margin, voters trust Trump more than Clinton to handle the economy and job creation, which are seen as the top issues by 72% and 62%, respectively. For comparison, former Massachusetts Gov. Mitt Romney held an average 4-point lead on President Barack Obama on the issue of the economy, according to the PPD average leading up to Election 2012. The average turned out to be identical to the margin in exit polls taken on Election Day. That advantage wasn’t enough to carry the day for the Republican nominee, who lost the popular vote 51.1% to 47.2%.

“The Donald” holds an even wider lead over Clinton on immigration–an issue seen as most important to 42% of voters–52% to 38%. Even though mediates and talking heads have claimed the issue will damage him in the general election, PPD has repeatedly (here and here) pushed back on that Beltway wisdom. First, Trump received high marks on his 3-point immigration plan and voters by a large margin agree with him on the major points of his argument including birthright citizenship, securing the border and deportation, the negative impact on the labor market and crime from illegal immigration.

“Most voters expect biased media coverage of the 2016 presidential race, and the media response to recent immigration comments by Hillary Clinton and Donald Trump is a good case in point,” says Fran Coombs, the managing editor of Rasmussen Reports.

In fact, slightly more than one-in-four Democrats (26%) trust Trump more than Clinton on immigration.

Meanwhile, despite her time as secretary of state, which Democrat surrogates repeatedly cite, voters also give Trump a narrow 46% to 42% edge on national security, while 13% are undecided. Though Clinton holds modest advantages on social issues (44% to 40%) and the environment (45% to 42%), Democratic candidates historically enjoy much wider leads over Republicans on these second-tier concern issues.

http://www.rasmussenreports.com/public_content/politics/mood_of_america/importance_of_issues.

The survey of 1,000 Likely Voters was conducted on September 2-3, 2015 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence.

Top Issues for Voters Very Important
Economy 72%
Job creation 62%
Health care 67%
Gov. spending 63%
Education 58%
Social Security 61%
Gov. ethics and corruption 58%
Taxes 51%
Small business 46%
Gun control 52%
Energy 48%
National Security 44%
Immigration 42%
Environment 37%
War in Afghanistan 26%

 

Republican frontrunner Donald Trump is absolutely dominating

[brid video=”15157″ player=”1929″ title=”Donald Trump Talks Being the Front Runner of the GOP Presidential Race”]

A very different Donald Trump appeared on NBC’s The Tonight Show with Jimmy Fallon on Friday to speak about the race, the debate, 9/11 and Hillary Clinton. Trump did receive a decent amount of applause and joked around with Fallon, who was highly amused by his guest.

[brid video=”15158″ player=”1929″ title=”Donald Trump Talks About Preparing for Presidential Debates”]

“It is what it is,” Trump said about debates. “You’ve learned and if you’re an intelligent person you have to understand that about yourself otherwise you’re not going to be very good up there. The first debate, I won every single poll where they did polls on who won the debate.”

[brid video=”15159″ player=”1929″ title=”Speed Interview with Donald Trump”]

“And I would say I was not asked the nicest questions,” Trump said of last month’s FOX News debate. “I would say that the questions that I was asked, in my opinion, they were unfair, but these are minor details. But every polls — Time magazine, Drudge and everybody that did a poll.”

A very different Donald Trump appeared on

national-debt-capitol-hill-budget

(Photo: PBS)

I’m a big fan of fiscal data. In part this is because I’m a policy wonk, but I also like budget numbers because they generally provide strong evidence for my philosophical belief in small government and spending restraint.

For instance, I enjoy sharing my table showing nations that have enjoyed great success with multi-year limits on spending growth, particularly since I enjoy putting my leftist friends in an uncomfortable position by asking them for a similar list of countries that have made progress by raising taxes (hint: that’s called the null set).

golden-rule-examples

Source: IMF World Economic Outlook database.

Given my affinity for budget data, I was excited to learn that the Joint Economic Committee (JEC) just released “An Economic History of Federal Spending and Debt.” This new publication is filled with fiscal information starting in the late 1700s. To give you an indication, check out this chart which, in one fell swoop, provides more than 200 years of data on spending, revenue, and debt, along with information on major wars and economic dislocations.

Federal-Spending-Revenue-Debt-Historic-Projected

Since that’s an intimidating amount of information, I thought it might be a good idea to break out the most important set of numbers in that chart. But I warn you that I’m not about to share good news. This chart shows how peacetime federal spending dramatically expanded during the 20th century.

Federal-Spending-GDP-Share-1790-2014

The burden of federal spending measured as a percentage of GDP since 1791.

Since I’ve already decided that data on dependency in Denmark was the most depressing powerpoint slide in the world, I guess we’ll call this the most tragic chart in the world. Especially since it symbolizes a very unfortunate change in the attitude about the proper role of the federal government.

A progressive philosophical shift in federal spending began under President Woodrow Wilson. …George Will—writing on Wilson’s underlying philosophy—succinctly contrasted Wilson with James Madison by noting, “Wilsonian government, meaning (in Wilson’s words) government with ‘unstinted power,’ is hostile to Madison’s Constitution, which, Madison said, obliges government ‘to control itself.’”

In other words, the left decided that government was a force for progress rather than a threat to liberty, so they wanted to undermine the Constitution’s limits on the federal government. And once the Supreme Court acquiesced to this perversion of the Constitution’s clear intent, any limits of federal power were swept away (evinced most recently by John Roberts’ tortured ObamaCare decision). And if you want to feel even sadder, check out the projections showing that America will become Greece in the absence of genuine entitlement reform.

Here’s a table from the JEC report that shows how bad attitudes, bad jurisprudence, and bad policy have led to a dramatic expansion in the burden of government spending. The most important column, which I’ve circled, shows that we used to have a very small federal government that consumed, on average, less than 3 percent of economic output. But now we have a Leviathan that diverts more than 20 percent of GDP to Washington programs.

Population-GDP-Federal-Revenue-Spending-Debt-By-Decade

Historical population, GDP, federal spending and federal debt by decade. (Source: Freedom and Prosperity)

The report isn’t just numbers. There’s also some very useful analysis.

For instance, it notes that FDR’s New Deal did not work (as I’ve repeatedly explained, though it also should have acknowledged that Hoover made the same mistakes).

On balance, empirical research provides little support for the contention that President Franklin D. Roosevelt’s Keynesian policies helped to pull the United States out of the Great Depression.

It also makes important points about the economic impact of government spending.

While more spending and a bigger federal government can mean more federal jobs, these jobs come at the expense of private sector resources, meaning fewer private sector jobs and lost economic opportunities. …there is an inverse relationship between federal spending and private payroll employment.

And it echoes arguments that I’ve made about the progress that was achieved during the Clinton years.

…though spending increased in real dollar terms during this period, as a percent of the economy, spending actually declined. In FY1995, non-interest mandatory spending equaled 9.75 percent of GDP and discretionary spending equaled 7.19 percent of GDP. In spite of the spending increases, by FY2001, mandatory spending amounted to only 9.56 percent of GDP and discretionary spending amounted to only 6.16 percent of GDP.

golden-rulePerhaps most important, the study endorses Mitchell’s Golden Rule!

…a politically viable path to a balanced budget and fiscal stability: Restrain the growth in federal spending below the rate of economic growth, and a sustainable fiscal environment will follow.

Last but not least, it endorses a spending cap modeled after the Swiss Debt Brake.

The ideal base for a spending cap would be similar to a GDP-cap, but it would provide greater spending restraint in economic booms and greater flexibility in economic downturns. Fortunately, such a measurement, which helps to smooth the business cycle, does exist: Potential GDP. …basing a spending cap on potential GDP is very helpful for budgeting purposes, as it creates a more predictable budget path over an extended period of time.

There is a lot of additional information in the JEC report, so if you have any interest in America’s fiscal history, it’s worth your time to read the whole thing.

P.S. Other developed nations basically have made the same fiscal mistake as the United States. Nations in Western Europe and Japan also used to have very small governments. Once the welfare state began, however, economic liberty morphed into bloated welfare states.

CATO economist Dan Mitchell uses latest fiscal

Are Illegal Immigrants Driving Increase in Violent Crime Rates?

Kate-Steinle-Francisco-Sanchez

Kate Steinle, left, was a 32-year-old woman from San Francisco who was shot and killed by Francisco Sanchez, an illegal immigrant with 7 felony convictions.

Juan Francisco Lopez-Sanchez, the 45-year-old illegal alien who confessed to shooting 32-year-old Kate Steinle on a pier in San Francisco, had an extensive criminal history and was deported at least 5 times prior to being charged with murder by city officials. With Sanchez admitting he chose the Bay area because he knew it was a sanctuary city, there has been national outrage in response to Ms. Steinle’s murder, with many claiming sanctuary cities across the nation are being besieged by violent crime committed by illegal immigrants.

“The cold truth is Kate Steinle is collateral damage to the insane far-left politics that have long corrupted the city by the bay,” said Bill O’Reilly, who has been a leading voice against sanctuary cities in the wake of the murder. “Again, dangerous people are walking around because of political correctness.”

O’Reilly is pushing hard for “Kate’s Law,” which would impose a mandatory minimum sentence of five years on any illegal immigrant with a criminal record caught in the country after being deported. “The mayor and the supervisors want to seem sympathetic to illegal aliens,” O’Reilly added. “That’s what this is all about — them and their liberal profile. The whole thing is absolutely disgusting.”

Proponents of sanctuary cities and even open borders have cited–over and over–a Pew Research Center study that concludes illegal immigrants commit crimes at a lower rate than the native population. However, at least in the case of San Francisco and greater California, research conducted by PPD suggests those claims are highly problematic for several reasons.

For instance, arrests for violent crimes in San Francisco have skyrocketed over the past four years, according to records from the San Francisco County Sheriff’s Department. This concerning trend in arrests for the most violent of the crimes listed below–murder and rape–has correlated with both an increase in the immigrant population and a series of policy changes aimed at skewing the data on violent crime committed by illegal aliens.

Records obtained by Judicial Watch and shared with PPD as a result of a July 9, 2015, California Public Records Act request detailed violations of the following crimes:

187 Penal Code

(1st & 2nd Degree Murder) 

240 Penal Code

(Simple Assault) 

243 Penal Code

(Battery) 

261 Penal Code

(Rape)

2011

87

99

1600

10

2012

101

76

1501

45

2013

128

95

1592

45

2014

135

93

1516

47

2015

78

54

908

23

Total

529

417

7117

170

“These numbers reflect the number of charges for arrests and bookings (not just arrests),” said Bay area Sheriff’s Department Assistant Legal Counsel Mark Nicco.

Note the increase in crime from 2013 to 2014, and the decrease in 2014 to 2015. In fact,  the overall arrest rate has plunged by 42 percent according to Max Szabo, a spokesman for the San Francisco District Attorney’s Office. This is where the data starts to fail the smell test. In 2013, the city announced it would disobey federal law, and passed an ordinance that required San Francisco law enforcement to ignore most U.S. Immigration and Customs Enforcement (ICE) detainers. The release–NO IMMIGRATION AND CUSTOMS ENFORCEMENT DETAINERS–reads as follows:

Sheriff Ross Mirkarimi announces that effective immediately; The San Francisco Sheriff’s Department will no longer honor U.S. Immigration and Customs Enforcement (ICE) detainers unless they are supported by judicial determination of probable cause or with a warrant of arrest. As a member of the San Francisco Board of Supervisors, Ross Mirkarimi advocated for separation of the local criminal justice system from the immigration enforcement system. As Sheriff, he strategically advanced department policy to reflect this belief.

These detainers, which the city began to ignore just months before the rates began to decrease, required San Francisco authorities to hold detained illegal alien criminals until federal authorities could determine whether to take them into custody. As a result, and by the department’s own admission, the policy reduced the number of individuals released to ICE authorities by 62 percent.

“Citizens understand that when San Francisco and other sanctuary cities release illegal alien criminals onto the streets, crime is going to increase,” said Judicial Watch President Tom Fitton. “These new crime statistics suggest that there are more murders and an epidemic of rape linked to San Francisco’s releasing illegal alien criminals in violation of law.”

Admittedly, because of officials are intentionally withholding the immigration status of persons arrested, it is difficult to establish a direct causation between increased crime and increased immigration. “This information is not tracked by the Jail Management System,” Nicco admitted.

However, according to the Public Policy Institute of California, a nonpartisan policy think-tank that examined data from the California Department of Corrections and Rehabilitation, Hispanics represent a whopping 42% of offenders, higher than the 38.4% represented statewide according to the latest U.S. Census Bureau stats, and far higher than the near-16% in the Bay area. With other data sets, we can winnow down the list of potential demographics responsible for current crime rates, though it is nearly impossible to get an accurate proportional representation.

With city officials statewide ignoring ICE detainers, the number of repeat offenses by illegal immigrants unsurprisingly increased. Coincidentally, since public safety realignment began statewide in 2011, second striker commitments have increased from 8,992 to 10,267, and these inmates now represent 26% serving a sentence, up from 16% by midyear 2013.

But what about the claim that net immigration has been zero. That, too, is simply untrue, but because officials are not keeping the same records for the illegal immigrant population that they keep on all other groups, the real numbers are both underestimated by government agencies and extremely difficult to undercover.

Difficult, but not impossible.

A new analysis of monthly Census Bureau data by the Center for Immigration Studies shows that the nation’s immigrant population (legal and illegal) hit a record high of 42.1 million in the second quarter of this year — an increase of 1.7 million since the same quarter of 2014. The monthly Census Bureau data, referred to as the Current Population Survey (CPS), found the nation’s immigrant grew by 4.1 million from the second quarter of 2011 to the second quarter of 2015. Those gains, by far, are vastly driven by Mexican immigrants.

Growth in the immigrant population in the last year was led by a 740,000 increase in the number of Mexican immigrants. While activists such as Univision anchor Jorge Ramos repeatedly claim otherwise, after slowing down or even falling in recent years, the number of Mexican immigrants again is growing significantly. The total Mexican immigrant population reached 12.1 million in the second quarter of 2015, which is the highest quarterly total ever an almost certainly underestimates the real figure when considering estimates of the illegal immigrant population from DHS and Pew.

illegal-immigration-population-estimates

Table 5 reports estimates of the illegal immigrant population from DHS, the Pew Research Center, and the Center for Migration Studies (CMS) compared to the total immigrant population in the second quarter of the same year. In addition to Mexico, growth in the immigrant population was led by a 449,000 increase in the number of immigrants from other Latin American countries in the last year. Again, this does not support the claims made by Ramos and other open borders activists.

Whether or not the correlation between crime and immigration is strong enough, is for the reader to decide. But polls clearly show Americans don’t buy the “official” numbers, either.

“Most voters expect biased media coverage of the 2016 presidential race, and the media response to recent immigration comments by Hillary Clinton and Donald Trump is a good case in point,” says Fran Coombs, the managing editor of Rasmussen Reports. A recent survey by Rasmussen found 53 percent of all voters agree that illegal immigration increases the level of serious crime in America.

Further, voters (62%) want the Justice Department to get tough on so-called sanctuary cities that refuse to enforce immigration laws, with 50% saying that ending all federal funding would have a big impact on the flow of illegals into this country. The same number say strong penalties against U.S. employers who knowingly hire illegal immigrants would reduce future illegal immigration a lot.

“We are so sorry our leaders are vial and corrupt,” read a note on Ms. Steinle’s memorial at the spot on Pier 14 where see was unnecessarily gunned down. “We cherish your life and memory.”

Recently obtained documents and research reveals a

Serena Williams

Serena Williams. (PHOTO: AP)

Serena Williams was defeated by an unseeded opponent in the U.S. Open semifinals, ending her bid for the first Grand Slam in more than a quarter-century. After her first 26 matches at major tournaments in 2015, she was unbeaten and nearing the first Grand Slam in since 1988.

In one of the biggest upsets in the history of tennis, Williams lost in 3 sets 2-6, 6-4, 6-4 Friday at Flushing Meadows to 43rd-ranked Roberta Vinci of Italy.

“I don’t want to talk about how disappointed I am,” Williams said.

Vinci, who had never before played in a Grand Slam semifinal, completely kept the 33-year old Williams off-balance with slices and net rushes, preventing her from joining the ranks of Steffi Graf, who in 1988 won all four Grand Slam tournaments in a single season. For Williams, this was her 12th three-setter in a major this season after winning titles at the Australian Open on hard courts in January, the French Open on clay courts in June, and Wimbledon on grass courts in July.

The No. 1-ranked Williams had 40 unforced errors, which was twice as many as Vinci and it reversed her 16 aces, including one at 126 mph.

“I thought she played the best tennis in her career,” Williams said about Vinci. “She played, literally, out of her mind.”

Vinci, not Williams, will now be participating in Saturday’s final and will face another Italian. Her opponent, the 26th-seeded Flavia Pennetta, is making her Grand Slam final debut after eliminating No. 2 Simona Halep 6-1, 6-3 earlier Friday.

Pennetta, 33, and Vinci, 32, have known each other since they were kids, having grown up in towns about 40 miles (65 kilometers) apart on opposite coasts of Puglia, a region in the southeastern heel of Italy’s boot-shaped peninsula. Now, they will face each other halfway around the world in a New York stadium in New York for a Grand Slam trophy.

Serena Williams was defeated by an unseeded

rick-perry-2016-presidential-announcement

Marcus and Morgan Luttrell were seen standing behind Rick Perry during the former Texas governor’s 2016 presidential announcement.

Former Texas governor Rick Perry is suspending his campaign, becoming the first in a crowded GOP field to drop out of the 2016 presidential campaign. Perry, the longest-serving governor in Texas history, announced his decision during a speech Friday night in St. Louis before conservative activists.

“I am suspending my campaign for the presidency of the United States,” Perry said.

Perry, who spent a month as the frontrunner when he ran in 2012 before fading, struggled to get his campaign off the ground, finding himself strapped for cash and stuck polling at near 1 percent. The former governor leaves the field of Republicans at 16 candidates just days before the next GOP debate, and the deadline to pay the $40,000 fee for the South Carolina Republican primary was fast approaching.

“We have a tremendous field of candidates — probably the greatest group of men and women — I step aside knowing our party is in good hands.”

Former Texas governor Rick Perry is suspending

Gap-consumer-sentiment-reuters

(A shopper leaves the Gap with a bag in New York City. (Photo: REUTERS)

U.S. consumer sentiment dropped to its lowest level since September last year, a survey released on Friday showed. The University of Michigan’s preliminary reading on the overall consumer sentiment index for September fell to 85.7, juxtaposed with the final reading of 91.9 posted in August. The index came in much lower than the median forecast of 91.2 among economists polled by Reuters, and September’s consumer sentiment index was the lowest since September 2014.

“The decline in optimism narrowed in early September from late August as consumers grew somewhat more confident that the underlying strength in the domestic economy would insure a continued expansion,” said Surveys of Consumers chief economist, Richard Curtin. “The twin strengths of higher employment and lower prices softened the impact from the losses in household wealth.”

The survey’s barometer of current economic conditions decreased to 100.3 from 105.1 in August, which was below economists’ media forecast of 103.6. The current conditions reading was the weakest since October 2014. The survey’s gauge of consumer expectations fell to a one-year low of 76.4 from 83.4 in August and was way below an expected 82.8.

Preliminary Consumer Sentiment Results for September 2015

Sep Aug Sep M-M Y-Y
2015 2015 2014 Change Change
Index of Consumer Sentiment 85.7 91.9 84.6 -6.7% +1.3%
Current Economic Conditions 100.3 105.1 98.9 -4.6% +1.4%
Index of Consumer Expectations 76.4 83.4 75.4 -8.4% +1.3%

“To be sure, consumers still anticipate a weaker domestic economy due to the global slowdown and are less optimistic about future growth in jobs and wages than they were a few months ago. While the current strength in consumer spending is still likely to persist in the year ahead, the more lasting impact of recent events may be a heightened attentiveness by consumers to potential negative developments,” Curtin added. “Without this recent shift in focus, consumers would have been more likely to view the Fed’s interest rate hike as confirming their prevailing optimism, but with the shift, it could be taken as a signal for a slower pace of future economic growth.”

The survey’s one-year inflation expectation came in at 2.9 percent in September, inching up from 2.8 percent in August. The survey’s five-year inflation outlook was 2.8 percent, also slightly up from 2.7 percent in August.

Consumer sentiment in August was much lower

Producer-Prices

Producer Price Index (PPI): A worker in a wholesale foods production and distribution warehouse.

The Labor Department reported on Friday that U.S. producer prices were flat in August, indicating inflation pressures remain weak ahead of the Federal Reserve’s decision on whether to hike interest rates next week. Economists polled by Reuters had forecast the PPI dipping 0.1 percent last month and falling 0.9 percent from a year ago.

The flat reading in the producer price index (PPI) last month follows a 0.2 percent gain in July, which reflects offsets by lower crude oil prices and a relatively strong dollar. The Labor Department said increases in profit margins for apparel, footwear and accessories retailing was the largest. Nearly half of August’s gains was due to a 7.0 percent surge on apparel, footwear and accessories retailing.

However, in the 12 months through August, the PPI fell 0.8 percent after a similar decline in July. It was the seventh straight 12-month decrease in the index.

Weak inflation–at least according to the PPI, which is not used by the Federal Reserve–in the face a on-the-surface tightening labor market complicated the decision to raise rates for Fed officials. The U.S. central bank’s policy-setting committee, which has kept rates at near-zero for nearly a decade, will meet on Sept. 16-17. But the potential for a hike in the Fed’s benchmark overnight interest rate has been reduced by recent financial market volatility, which was sparked by concerns over China’s economy.

Producer inflation is likely to remain muted in the near term after a report on Thursday showed import prices fell 1.8 percent in August, the largest drop since January.

Wholesale food prices rose 0.3 percent in August as the impact of an avian flu outbreak early this year lingers. Food prices slipped 0.1 percent in July. Wholesale chicken egg prices rose 23.2 percent after falling 24.2 percent in July due to a .

The volatile trade services component, which mostly reflects profit margins at retailers and wholesalers, gained 0.9 percent in August after increasing by 0.4 percent in the month of July. Excluding food, energy and trade services, producer prices edged up 0.1 percent in August after rising 0.2 percent in July. The so-called core PPI was up 0.7 percent in the 12 months through August.

The dollar’s 17.5 percent rise against the currencies of the United States’ main trading partners since June 2014 is restraining gains in the so-called core PPI.

The Labor Department reported on Friday that

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