new economy

　　

Recently, a female announcer, Clay McKoni, who has just resigned from CNN, hosted a video of President Trump on Facebook, commenting on Trump’s political achievements since he was in power for more than two hundred days. Great praise. In this 15-minute video, McKoni said: “The U.S. consumer confidence index has reached its highest level in 16 years, while the number of unemployed has reached its lowest level in 16 years. The stock market is setting new highs every day. President Trump finally The U.S. economy is taking the right direction." Some mainstream media in the U.S. commented that this video is pretentious. So, what exactly is the US economy under Trump?

Moderate GDP growth

 According to data released by the US Department of Commerce, the growth rate of US gross domestic product (GDP) in the first and second quarters was 1.2% and 2.6% (initial value), respectively, which exceeded the same period last year. The fundamentals of the US economy are generally healthy, and relevant data are mixed. , The mild recovery will continue. The economic rebound in the second quarter was mainly due to the growth of personal consumption expenditure, non-residential fixed investment, exports, and federal government spending. Among them, personal consumption expenditure increased by 2.8% in the second quarter, higher than the 1.9% in the previous quarter, and non-residential fixed investment increased by 5.2%.

 　 In fact, when Trump came to power, the US business community had high expectations for him. Trump promised to reduce corporate tax from 35% to 15%, abolish Obamacare to reduce the burden on companies, and invest $10 billion in infrastructure transformation. These undoubtedly gave the market and investors a lot of confidence, but the two parties in the United States continue to dispute, the Republican Party is also severely divided, and Congress has been unable to approve the health insurance plan promised during Trump's campaign. Bloomberg reported that even if Trump's economic policies are passed this year, the boost and impact on the economy will not be reflected until next year at the earliest. Therefore, many economists have lowered their expectations for the growth rate of the US economy.

 　 In the latest "Global Economic Outlook" released on July 24, the International Monetary Fund lowered its forecast for 2017 U.S. GDP growth from 2.3% to 2.1%, and lowered its forecast for 2018 from 2.5% to 2.1%. The 3% expected target set by Trump at the beginning of his tenure seems to be difficult to achieve. The International Monetary Fund believes that the political chaos and uncertain fiscal policy in the United States will cause the expansion of the US fiscal policy to be less than previously expected, which is the main reason for its downward adjustment of economic growth expectations.

The hot stock market and housing market

 　 The U.S. stock market in 2017 can be described as "the sesame blossoms are rising." From November 9th last year’s election day to August 16th this year, the three major U.S. stock indexes continued to break historical records. The Dow Jones index continued to rise from 18,332 points to 22024.87 points, an increase of up to 20%; the Nasdaq index rose 22%, the benchmark The General 500 Index rose 15%.

    The stock market has continued to rise for multiple reasons: First, the Trump campaign promised tax cuts, burden reductions, reduced supervision, and increased spending to stimulate the economy, which has brought expectations to the market, although the policies that investors are looking forward to have not yet come. , But other good news continues to heat up the stock market. Second, the growth of corporate profits is the main reason for the recent stock market's consecutive record highs. The quarterly financial reports of listed companies have been released at the end of July. The profit growth of listed companies such as Apple and Boeing represents a healthy market trend and has driven stock indexes to record highs. Third, in the first half of this year, the economies of the world's major economies resumed their economic growth simultaneously, which boosted investors' confidence and was an external factor that promoted the rise of stock indexes. Fourth, as far as the U.S. is concerned, some positive data on the U.S. economic development, such as the rebound in economic growth in the second quarter, rising employment, and rising consumer confidence index, have also continued to encourage investors’ profitability and increased funding. Invest. Fifth, the dovish attitude of the Federal Reserve is also one of the factors that investors can take advantage of. As inflation indicators have not reached the target for a long time, the Fed is divided on the timing of the start of the reduction of the balance sheet. But the boom in the stock market does not mean that the economy has been injected with new impetus, nor does it mean that the economic growth rate and the rise in middle-class wages.

 The U.S. housing market is extremely hot this year, and housing prices continue to rise. The median house sale price in June was US$263,800, an increase of 6.3% from a year ago. House prices have continued to rise for the 64th consecutive month. The main reason for the increase in house prices is the shortage of housing, and the housing stock has been declining for 23 consecutive months. Moderately priced houses will soon be snapped up, many buyers cannot find a suitable house, and the high housing prices have discouraged many people. As a result, a strange circle appeared in the housing market. Housing prices rose sharply, but sales volume was declining. Sales volume fell 1.8% in June. The latest data from the US Department of Commerce on August 16 showed that the housing start rate fell 4.8% in July, which is undoubtedly bad news for buyers who desire to own their own homes, indicating that housing prices will continue to rise in the third quarter. At present, housing prices are still stubbornly high. Summer is usually the off-season of the US housing market, but the housing market does not show signs of seasonal changes in prices.

Steady employment growth

 　 In 2017, the number of jobs in the United States continued to grow, and the unemployment rate continued to decline, but it was still slightly inferior compared with the same period in 2016. According to the "Washington Post" report, Trump has created 1.049 million jobs since he took office, which is lower than the 124.6 jobs created during Obama's administration in the same period last year. According to data from the US Department of Labor, 209,000 new jobs were created in the United States in July, far exceeding market expectations, with the number of employed persons reaching 153.513 million. The unemployment rate in July was 4.3%, which was the lowest in 2016. Thanks to Trump's efforts, Foxconn, Toyota and many other foreign companies announced that they will build factories in the United States. It seems that Trump still needs to continue his efforts to achieve his goal of "bringing jobs back to the United States."

 　 Generally speaking, after Trump took office, the economy has developed in a healthy and stable manner, and the trade deficit has also improved. This has caught up with the good opportunity of the simultaneous recovery of the world economy. If you make good use of it, introduce new economic policies as soon as possible, and get on the train of world economic recovery, the U.S. economy may still be able to accelerate its development.