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Breitbart Business Digest: Growth and Inflation Are Too Hot for the Fed to Cut in September
by John Carney
Breitbart.com
Economic Growth Rips Higher Than Expected
Economic growth picked up more than expected in the spring, not only undermining the case for rate cuts but also raising the possibility that the Federal Reserve still has not done enough to cool the economy off to bring inflation down to its two percent target.
The Bureau of Economic Analysis said Thursday that real gross domestic product (GDP) expanded at a 2.8 percent annual rate in the second quarter. That is twice the pace of the 1.4 percent recorded in the first quarter of the year and significantly stronger than the two percent consensus forecast.
Consumer spending, the engine of the U.S. economy, rose at a 2.3 percent annual rate in the April through June period, matching the rate of growth in the first quarter and defying expectations for a slowdown. This contributed about 1.6 percentage points to growth.
Rep. Nanette Barragán Says Democrats Need ‘Four More Years’ to Push Through the Policies Needed to Lower Inflation and High Cost of Living
by Jack Hellner
American Thinker
The Democrat party is full of economic illiterates, and here’s the latest example, from a report out at Breitbart News:
Dem Rep. Barragán: Biden Needs ‘Four More Years’ to ‘Finish the Implementation’ of Policies to Lower Prices
On Friday’s broadcast of MSNBC’s ‘José Díaz-Balart Reports,’ Rep. Nanette Barragán (D-CA) stated that people still have concerns about prices, but President Joe Biden is asking Congress to do things like rent control and has a plan to lower prices and ‘he needs four more years to finish the job, to finish the implementation of these policies, to build on them to help the American people.’
(Now of course this was before Joe Biden dropped out of the race, but since Kamala Harris is being anointed as the nominee without any input from the Democrat voter base, and she’s cut from the same cloth and Biden’s own right-hand man, we can rightfully assume she would carry on with Biden’s economic approach.)
Have We Been Living in an MMT World Since 2008?
by Joseph T. Salerno
Mises.org
I recently viewed Finding the Money, a video aimed at persuading a popular audience of the putative merits of Modern Monetary Theory (MMT). The video debuted this past May on several streaming platforms and theaters throughout the U.S. Whether it succeeded or not in its purpose, I will leave it for others to judge.
What I found most noteworthy in the 95-minute video was a brief clip of an interview with George Selgin, an economist of some stature in free-market monetary policy circles. When questioned about what MMT proponents get wrong or factually incorrect, Selgin waffles a bit and replies, “it’s a matter of emphasis and rhetoric.” He then goes on to give a more definite answer: “The MM theorists do say there is ultimately a scarcity of resources. But too often, they treat the world as if the norm is one of generally unemployed resources and plenty of ‘em.” Here, Selgin seems to be challenging MMT’s central claim that politicians and bureaucrats can costlessly conjure up real resources to expend on their favorite programs simply by creating and spending fiat money.
Gold Rises After Sharp Sell-off, Focus Shifts to U.S. Inflation Data
by Polina Devitt
Reuters.com
LONDON, July 26 (Reuters) – Gold prices regained some ground on Friday after falling sharply in the previous session, ahead of key U.S. inflation data that could offer more cues on when interest rate cuts will start.
Spot gold rose 0.3% to $2,370.5 per ounce by 1110 GMT, but was down 1% so far this week. Prices had hit their lowest since July 9 on Thursday after stronger-than-expected U.S. economic growth data.
“That’s a bearish factor for gold prices, which tend to fare worse during times of economic strength when other assets perform more positively,” said Frank Watson, market analyst at Kinesis Money.
Inflation Remained Low in June
by William J. Luther
The American Institute for Economic Research
Federal Reserve officials have been hoping for evidence that inflation is returning to target. The latest data from the Bureau of Economic Analysis (BEA) should give them some confidence. The Personal Consumption Expenditures Price Index (PCEPI), which is the Fed’s preferred measure of inflation, grew at a continuously compounding annual rate of 0.9 percent in June 2024, bringing the three-month average annualized rate down to 1.5 percent. The PCEPI has grown 2.5 percent over the last year and 3.7 percent per year since January 2020, just prior to the pandemic. Prices today are 8.8 percentage points higher than they would have been had the Fed hit its 2-percent inflation target over the period.
Core inflation, which excludes volatile food and energy prices, also remains low. Core PCEPI grew at a continuously compounding annual rate of 2.2 percent in June 2024, and 2.3 percent over the last three months. Year-on-year core PCEPI growth is now 2.6 percent, compared with the 3.6 percent core PCEPI inflation realized per year since January 2020.
Kamalaflation: How Harris Caused Inflation by Casting Decisive Votes for Biden’s Economic Agenda
by John Carney
Breitbart.com
Democrat strategists hope that Kamala Harris can avoid responsibility for the inflation surge that soured the public on President Biden but the critical role she played in passing the legislation that fueled the worst price increases in four decades will make that a challenge.
The Biden-Harris administration’s sweeping $1.9 trillion American Rescue Plan passed a deeply divided Senate in March of 2021 only after Harris cast the tie-breaking vote in favor of the pandemic spending bill that even prominent Democrat economists had warned would overheat the economy.
Republicans voted unanimously against it, criticizing the measure as unnecessary, unaffordable, and dangerously inflationary.
Frustration Over Bills, Inflation Could Shape 2024 Presidential Election
by Susan Tompor
Detroit Free Press
More often than not, I’m asking economists about things like the Federal Reserve, the jobless rate and the outlook for auto sales. Typically, I’m not bringing up second-hand conversations with hairdressers.
But lately, such conversations can matter when you consider whether, somehow, Vice President Kamala Harris might be able to put 10,000 miles between her and the shocking 40-year high for inflation that hit in June 2022.
It turns out, everyday conversations can tell you a great deal about economic angst and why some people think the U.S. economy stinks. The economy is lousy, you say, even when the U.S. unemployment rate was a mere 4.1% in June?
African Nations Turn to Gold to Protect Against Currency Losses
by Ray Ndlovu and Okech Francis
BNN Bloomberg
(Bloomberg) — African nations are rushing to build their gold reserves to hedge against geopolitical tensions that have battered their currencies and fanned inflation.
Nations from South Sudan, Zimbabwe and Nigeria have either taken steps to shore up their holdings or are considering doing so. The move follows that of central banks in places such as China and India that have accumulated gold to diversify reserves and reduce dependency on the US dollar. About 20 central banks are expected to stock up in the coming year, according to a World Gold Council survey.
“As a diversification strategy, that makes some sense,” said Charlie Robertson, head of macro strategy at FIM Partners. “While gold does not pay interest, unlike reserves held in US treasuries, this hasn’t mattered because the gold price has risen so much. It’s been a profitable trade.” The price of bullion has rallied 16% this year to $2,396.59 an ounce on Monday.
Inflation Drove Prices Higher at Coca-Cola, Consumers Still On the Hunt for Value: CEO
by Brooke DiPalma
Yahoo! Finance
Coca-Cola (KO) held on to its momentum to deliver another bubbly quarter on Tuesday.
The soda giant beat Wall Street’s estimates in Q2, led by global demand for its beverages, despite higher prices. Revenue grew 3% to $12.4 billion, compared to the expected $11.76 billion. Earnings per share came in 7% higher year over year at $0.84, compared to estimates of $0.81.
On a call with Yahoo Finance, CEO James Quincey attributed the results to “a strong execution of the strategy.” Consequently, the company is raising its 2024 guidance.
Biden is Out, but It’s Still the Inflation Election
by Rick Newman
Yahoo! Finance
Democrats seem thrilled now that Vice President Kamala Harris has replaced Joe Biden as their likely presidential nominee. Donations are pouring in, endorsements are piling up, and it’s now Republicans, not Democrats, who have to grapple with an elderly presidential nominee.
This fresh start for Democrats, however, doesn’t alleviate a problem Harris inherits from Biden: Voters associate the Biden administration and Democrats in general with the high inflation of the last two years.
And there’s no easy way for Harris to wash her hands of it.