The U.S. and world economy has been shrugging off the effects of tariffs for over a year. But no more. This week's first three economic articles highlight the fact that tariffs, and trade barriers are finally having a significant impact on economic growth. Economies are still growing. They just feel like they are bogging down. Articles on that and more in this week's The Friday Buzz. Enjoy!
- Fed Hints, Stocks Sprint: Earlier this week, the chair of the Federal Reserve, Jerome Powell, stated the Fed was monitoring the trade tensions and would act to sustain economic growth if needed. The stock market, which has been lower the last month on growing concerns of growth and trade issues, immediately responded with a big rally. In the past, the Fed has been critiqued for acting too slowly to economic events so a more proactive Fed will be viewed positively by the markets.
- Employment Growth Slows: The ADP National Employment Report was released Wednesday. It showed that U.S. private employers added only 27,000 jobs in May, well below expectations. This was the smallest monthly increase in almost a decade and the lowest of the current expansion. Monthly numbers can sometimes be an anomaly, and more employment data will come in today (Friday) from the U.S. Bureau of Labor Statistics. Markets will be paying close attention.
- Who is Alex? He is our summer intern at RSWA! Alex is a sophomore studying Finance at the University of New Hampshire's Peter T. Paul College of Business and Economics. He will be working on various projects at RSWA and will be around till mid-August. In his spare time, Alex is a huge baseball fan as well as a player and coach, he skis, and likes to travel and has already visited 16 countries and three continents! Be sure to welcome Alex to the RSWA family when you see him!
- World Bank Global Growth Projections Lowered: The World Bank lowered their expectations for 2019 global growth from 2.9% to 2.6%. They did this based on slowing global trade and less business confidence.
- How to Host a Wine Tasting: I was invited to a friend's house last week for a wine tasting. Every guest brought a bottle of something interesting. The host pulled out a fabulous French Burgundy of 1995 Chateau Ducru Beaucaillou which won Wine of the Year in 1995 and Robert Parker has described it as having "hedonistic characteristics." I'd never had it before and it was delicious! Click here for tips from Food & Wine on hosting a wine tasting party. Salut!
- GOP Tariff Pushback? So far in President Trump's term, Republicans have rarely stood up to any of his initiatives. But the new tariffs on Mexico may be different. Most Republican Senators aren’t fans of tariffs to begin with, especially when using them to achieve political goals such as slowing immigration. This may be one issue the GOP-controlled Senate overrides a veto or just by voicing their objections publicly, undercuts the President's leverage.
- Economics and Well-Being: This week, New Zealand's government released a budget aligning citizens' well-being with spending priorities. It is a major shift from traditional government budgets that only focus on economic growth, taxes, etc. The NZ budget proposal significantly increases spending in areas such as mental health and domestic violence to help those most in need. I'm sure other countries will be watching how the citizens react to this new budget paradigm and if their budgetary focus needs to shift as well.
- It Takes Only 15 Minutes to be on Vacation (Almost): Speaking of well-being, researchers found that just 15 minutes of meditation in a day was associated with similar effects of one day of vacation. People who meditated displayed more mindfulness, an increase in positive emotions, as well as a decrease in negative emotions. One more reason to take a short break every day.
- D-Day 75th Anniversary: This week, leaders met at Normandy to honor and remember those who battled there so long ago. Sometimes it's hard to fathom what those serving that long ago had to go through to create the world we live in now. Let's hope the leaders of today can duplicate that era's common purpose, values and ability to overcome differences to work together for the common good.
Have an enjoyable, and peaceful weekend!