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Economy is the foundation of America's development

The economy of the United States is the world's largest national economy in nominal terms and second largest according to purchasing power parity (PPP), representing 22% of nominal global GDP and 17% of gross world product (GWP)

Economy is the foundation of America's development

The United States has a mixed economy and has maintained a stable overall GDP growth rate, a moderate unemployment rate, and high levels of research and capital investment.

Economy is the foundation of America's development

The US has abundant natural resources, a well-developed infrastructure, and high productivity. It has the world's ninth-highest per capita GDP (nominal) and tenth-highest per capita GDP (PPP) as of 2013.

Economy is the foundation of America's development

The US not only has the largest internal market for goods, but also dominates the trade in services. US total trade amounted to $4.93T in 2012. Of the world's 500 largest companies, 128 are headquartered in the US.

Economy is the foundation of America's development

The United States has one of the world's largest and most influential financial markets.

Wednesday, November 15, 2017

Tech firms lift US stock markets to record highs


Nasdaq Composite index hit a new high of 6,664, rising by 1.6% on Friday. Photograph: Mark Lennihan/AP
US stock markets hit new peaks on Friday after forecast-beating results from the technology companies including Google’s parent company Alphabet, Amazon and Microsoft .
All three saw their shares soar to record highs in the wake of better than expected quarterly updates, adding billions in revenues and increasing profits compared with the same three-month period in 2016.
Overall, the technology-heavy Nasdaq Composite index rose 1.6%, hitting a record high of 6,664 by mid-morning in New York. The S&P technology index – which has gained about 30% so far this year – added 2.6% to a new peak of 1,086.
Many analysts had become concerned that the value of technology shares had reached unsustainable levels and could be heading for a sharp correction, but the results from the three companies announced after the market closed on Thursday allayed fears of a new dotcom bubble.
Eric Wiegand, the senior portfolio manager at US Bank Private Wealth Management, told Reuters: “While valuations are full, it certainly becomes imperative on them to deliver solid operating results and that’s something that we did see.”
Amazon shares jumped more than 11% in early dealings on Wall Street, with third quarter revenues up 34% to $43.7bn, helped by its recent purchase of the Whole Foods Markets chain.
Microsoft’s share price added nearly 8% as investors welcomed news of a 12% rise in revenues to $24.5bn, better than the expected $23.56bn.
Adding to the technology bonanza was Alphabet, which saw revenues jump 24% to $27.8bn, with stronger than expected advertising sales at Google and a strong performance from YouTube. Concerns about the company’s dominant market position have yet to hit its financial results, and the shares rose about 6%.
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Amazon’s share price rise added nearly $9bn to the value of the 17% stake in the business owned by chief executive Jeff Bezos.
The rise took his total wealth to about $92.5bn and allowed him to overtake Microsoft founder Bill Gates as the world’s richest man. Gates’ gain on Friday amounted to about $550m, taking his wealth to $88.5bn, although he has given away much of his fortune to charity.
This is the second time Bezos has become the world’s richest man. In July, hopes for positive second quarter figures from Amazon lifted the company’s shares and briefly pushed Bezos above Gates in the rankings. But the results disappointed investors , Amazon shares fell back and Gates regained his crown.
This time Amazon has outperformed expectations, with net earnings at $256m or 52 cents a share, well above the forecasts of just three cents.
As well as the boost from Whole Foods’ grocery sales, Amazon benefited from its Prime Day promotion in the summer. After the results, Credit Suisse raised its target price for Amazon shares from $1,350 to $1,385.
But the effects of Amazon continuing to win business from older retailers reliant on physical stores was shown by a profit warning from department store JC Penney. Its shares dropped 17% after it said it was forced to sell off unwanted inventory at discount prices and warned it no longer expected an increase in full-year sales.
Microsoft, as part of its revival under chief executive Satya Nadella, has focused on its cloud computing business to offset flagging sales of its Windows software. Revenues from the cloud business – which includes products such as Office 365 - rose 14%, while the personal computers division slipped 0.2%.
Microchip maker Intel, up 5% after its results, and Twitter, 4% higher following slightly better than expected revenues, also added to the buoyant mood in the sector.
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Apple, which saw strong demand for its iPhone X on its first day of sales on Friday, added 2% ahead of results next week. Facebook, which also reports next week, rose 3%.
But the Dow Jones Industrial Average edged up only 0.1%, weighed down by disappointing results from oil company Chevron and a downbeat report from pharmaceuticals business Merck, which suffered disruption to its business after a cyber attack earlier in the year. The Dow was also undermined by the dollar strengthening in the wake of a higher than expected third quarter GDP figure, adding to belief that the US Federal Reserve is likely to raise interest rates at its December meeting.
In Europe, most markets ended higher, thanks to weakness in the euro after Thursday’s European Central Bank meeting indicated a gradual reduction in its bond buying programme.
But Spain’s Ibex dropped more than 1% after the Catalan government controversially declared independence following the 1 October referendum.

Since you’re here …

… we have a small favour to ask. More people are reading the Guardian than ever but advertising revenues across the media are falling fast. And unlike many news organisations, we haven’t put up a paywall – we want to keep our journalism as open as we can. So you can see why we need to ask for your help. The Guardian’s independent, investigative journalism takes a lot of time, money and hard work to produce. But we do it because we believe our perspective matters – because it might well be your perspective, too.
I appreciate there not being a paywall: it is more democratic for the media to be available for all and not a commodity to be purchased by a few. I’m happy to make a contribution so others with less means still have access to information.Thomasine F-R.
If everyone who reads our reporting, who likes it, helps fund it, our future would be much more secure. For as little as £1, you can support the Guardian – and it only takes a minute. Thank you.
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Friday, November 10, 2017

The Guardian view on Trump in China: a bromance unlikely to run smooth Editorial


US President Donald Trump and China’s President Xi Jinping attending a state dinner at the Great Hall of the People in Beijing on Thursday. Photograph: Thomas Peter/AFP/Getty Images
MAO observed that a revolution is not a dinner party. Neither are great power relations – even if they manifest temporarily as a lavish meal in the Forbidden City. Wednesday’s feast for Donald Trump was the first time the palace in central Beijing had hosted a banquet for a foreign leader since the Communist party took power in 1949. Beijing, adept at ladling on such flattery, pitched this leg of the US president’s Asia tour as a “state visit-plus”and arranged a greeting party of children to cry: “Welcome to China! I love you!”
It seems to have worked – for now. The visit’s arrangements were magnificent, incredible, beautiful, impressive, terrific and unforgettable, Mr Trump enthused. His description of his “great chemistry” with Xi Jinping – a “very special man” to whom he has “an incredibly warm” feeling – made it sound like a fully fledged bromance. (He too was presumably soft-soaping – but which leader seems more easily swayed?) The man who accused China of raping the US economy and promised to label it a currency manipulator on his first day in office (he still hasn’t) said the trade relationship was unfair: but he blamed his predecessors, not Beijing. He tweeted that he is looking forward to building “an even STRONGER relationship”.
That Mr Trump seems to enjoy visiting authoritarian countries more than traditional democratic allies has already been noted. He is uninterested in paying even lip service to human rights issues, such as the activists and dissidents harassed or placed under house arrest for his visit. America’s retreat from global leadership is a gift to Beijing; this week we learned that the US will be the only country outside the Paris accord if the president follows through on his pledge to leave, while Mr Xi has positioned China as the champion of action on climate change.
But it is hard to believe this love is built to last. Mr Trump is predictable chiefly in his inconsistency (demonstrated already in his approach to China, as well as elsewhere). Mr Xi’s remark that the two nations’ interests were “closely converging” seems, to put it mildly, a stretch. Individual deals do nothing to address structural trade issues – and many of those signed in Beijing were non-binding statements of intent. Shared anger at North Korea cannot disguise very different interests and priorities. The administration’s talk of the “Indo-Pacific” (extending the region to include India as a counterweight) and Mr Trump’s golf-buddy rapport with Japan’s Shinzo Abe (another expert ego-stroker, who handed over a baseball cap reading “Donald and Shinzo: Make Alliance Even Greater”) underscore concerns about China’s rise. In the US, views on Beijing are hardening.
China’s disdain for the US is increasingly clear, among the population as well as in the leadership. So is its increasing confidence in the world and open embrace of global ambitions. It has spent years pouring money into its military as it attempts to catch up with the US; this year it opened its first foreign military base. Its mammoth One Belt, One Road international infrastructure project is another indication of its regional ambitions. But the clearest one came at last month’s Communist party congress. It was notable not only for cementing Mr Xi’s immense power (the “great political victory” applauded by Mr Trump), but also for its trumpeting of a resurgent China, regaining its rightful place in the world – and reshaping the rules as it does so. As Mr Xi spelt out, “It will be an era that sees China moving closer to centre stage” and becoming a model for others. His vision of “great power diplomacy with Chinese characteristics” will no doubt include more cosy dinners, but overall the US and others will find it hard to stomach.

Since you’re here …

… we have a small favour to ask. More people are reading the Guardian than ever but advertising revenues across the media are falling fast. And unlike many news organisations, we haven’t put up a paywall – we want to keep our journalism as open as we can. So you can see why we need to ask for your help. The Guardian’s independent, investigative journalism takes a lot of time, money and hard work to produce. But we do it because we believe our perspective matters – because it might well be your perspective, too.
I appreciate there not being a paywall: it is more democratic for the media to be available for all and not a commodity to be purchased by a few. I’m happy to make a contribution so others with less means still have access to information.Thomasine F-R.
If everyone who reads our reporting, who likes it, helps fund it, our future would be much more secure. For as little as £1, you can support the Guardian – and it only takes a minute. Thank you.

Sunday, November 5, 2017

Jerome Powell: a boring choice for Fed chair, despite the interesting times


Donald Trump with his choice for Fed chairman, Jerome Powell. Photograph: Carlos Barria/Reuters

Jerome Powell was Wall Street’s choice to run the Federal Reserve. Given Donald Trump’s record on doing the unexpected, there was always the chance the president would pick another candidate, but for once he did not make waves.
Powell was the business-as-usual candidate. Nothing he has said or done since he first joined the Fed’s board five years ago suggests he intends to make life difficult for Trump or rattle the financial markets. Well, not deliberately at least, for while Powell is the boring choice, he may not necessarily prove to be the safe choice.
Clearly, the safest choice would have been for Trump to appoint Janet Yellen for a second term as chair of the world’s most powerful central bank. After all, she has presided over a period in which the US economy has grown, unemployment has fallen steadily and inflation has remained below its target. What’s more, without any real tremors, she took the first steps towards the normalisation of monetary policy by edging up interest rates and starting to unwind the Fed’s quantitative easing programme.
This is quite a task, because all central banks are to an extent flying blind. Their models tell them that falling unemployment should by now have led to a significant pick-up in wage inflation, but that’s not happening. The chances of policy error are high.
Washington politics explains why Powell has a seat on the board. Barack Obama wanted Jeremy Stein to fill one of two vacancies, but thought his nominee might be blocked by a Republican-dominated Senate. Needing a Republican makeweight to ease Stein’s passage, Obama chose Powell.
Nothing that has happened since suggested that Powell was destined for greater things. His boilerplate speeches have tended to focus on regulation, and when straying into the realm of monetary policy he has been careful not to deviate from whatever the current Fed orthodoxy might be. Had Trump lost the presidential race, there would not have been the slightest chance of Powell getting the top job. Churchill’s put-down of Attlee – a modest man with much to be modest about – summed him up

What the president wanted was a Republican without particularly strong views on monetary policy, someone who would continue with Yellen’s softly, softly approach to raising rates but would be ready to roll back some of the post-crisis regulations imposed on the financial sector. By those criteria, Powell was the perfect choice.Churchill was, of course, wrong about Attlee, and it is possible that Powell will go on to be one of the all-time great Fed chairmen. But it seems unlikely. Trump did not want Yellen because she was a Democrat. He didn’t want John Taylor or Kevin Warsh because they think the Fed needs to get ahead of the curve on inflation by raising interest rates more quickly.
And, in the right circumstances, he may do just fine. If monetary policy is all about the occasional tweak to interest rates – as it was in the Great Moderation of the 1990s – there will be little to fear. Things will get trickier if it proves harder than the Fed thinks to steer the US economy between recession and inflation, or if a crisis arrives from an unexpected quarter.
Unlike Yellen or her predecessor Ben Bernanke, Powell is not an economist. He is a lawyer by training, and has worked in investment banking and private equity. Being a trained economist is not everything. There have been trained economists – Arthur Burns in the 1970s, for example – who have made a right pig’s ear of running the Fed.
But equally there are times – such as when Mario Draghi rescued the euro from its existential crisis in 2012 – when being a journeyman is not sufficient. And there is nothing in Powell’s CV or his time at the Fed to suggest he is anything more than that.

Oil is up: but what would really help renewables is costlier carbon

High oil prices are a boon for the renewables industry. The higher the price of consuming black gold, the more consumers will be prepared to try alternatives, from solar to wind. So the industry might have been expected to cheer the surge last week in Brent crude prices to near a two-year high of $60 a barrel.
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Yet the steep cuts in the cost of offshore wind and especially solar electricity generation mean that the economics are already running in their favour. In some countries, wind and solar power are now cost-competitive with oil, coal and natural gas-fired power plants, even when carbon emissions are not priced in.
That leaves the momentum with renewables, even when the oil price falls – as it did in 2014, when the price of a barrel tumbled from around $115 over 18 months to less than $40 in January 2016. And that’s just as well, since oil prices are unlikely to rise much more, despite the public statements from Opec and Russia that they will hold back about 1.8m barrels per day until next spring in an attempt to push prices higher.
There is more to come from the Americans, who mothballed many of their derricks before hurricane Harvey hit the Gulf. So US production, despite hitting its highest level for at least three decades, is likely to rise further, which will act to depress prices.
That’s not to say governments can relax and watch renewables win the day. Putting a price on carbon emissions remains important when global temperatures are rising fast.
Unfortunately, the European system of carbon credits, which is supposed to tax heavy carbon users, is mired in controversy after several years of handing out credits that make it cheaper to belch out CO2 than invest in environmentally friendly alternatives. The market price for credits is €6 a tonne when it needs to be nearer €50.
The remedy is for governments to sidestep the failed market in carbon credits and impose a steeper cost on users. That would help much more than a rise in oil prices.

Ryanair is flying as high as ever – even without its pilots

Ryanair bosses chose not to face the press last week when announcing half-yearly results – an absence surely unrelated to a decision in September to cancel thousands of flights due to lack of pilots.
Yet what the airline had to report was bulging profits, followed by news of its busiest October, cancellations or not. Plenty of pilots remain disgruntled, despite the airline’s deep delve into its pockets to prevent an exodus to competitors.
The rotas fiasco was never likely to be a “Ratners moment” for chief executive Michael O’Leary, a man who had long made an art of upsetting his customers. But Ryanair looks to have been barely jolted by the turbulence – and now, as competitors fall by the wayside, it forecasts higher revenues for the winter.
Not that much higher, though: this autumn’s lesson will reaffirm O’Leary’s conviction that the only way Ryanair could lose its passengers would be by raising fares.

Since you’re here …

… we have a small favour to ask. More people are reading the Guardian than ever but advertising revenues across the media are falling fast. And unlike many news organisations, we haven’t put up a paywall – we want to keep our journalism as open as we can. So you can see why we need to ask for your help. The Guardian’s independent, investigative journalism takes a lot of time, money and hard work to produce. But we do it because we believe our perspective matters – because it might well be your perspective, too.
I appreciate there not being a paywall: it is more democratic for the media to be available for all and not a commodity to be purchased by a few. I’m happy to make a contribution so others with less means still have access to information.Thomasine F-R.
If everyone who reads our reporting, who likes it, helps fund it, our future would be much more secure. For as little as £1, you can support the Guardian – and it only takes a minute. Thank you.
www.theguardian.com

Monday, October 30, 2017

US economy grows 3% in third quarter despite twin hurricanes


The rebuilding effort in Port Aransas, Texas. The commerce department said the storms probably suppressed business activity in areas including oil and gas extraction. Photograph: Eric Gay/AP

The US economy shook off the impact of two major hurricanes in the third quarter growing at a robust 3%, the commerce department reported Friday.
Steady spending from consumers and businesses over the quarter helped the economy to beat economic forecasts of 2.5% annual growth and came despite a dramatic slump in hiring in the wake of hurricanes Irma and Harvey.
The two hurricanes caused massive damage in Texas and Florida during August and September and were cited by the labor department as a major factor in the US economy losing 33,000 jobs in September, the first time in seven years that the economy had recorded a monthly fall in employment.
Houston’s metropolitan area, which bore the brunt of hurricane Harvey, is the country’s s fifth largest, and accounts for 3% of national economic output.
The impact of the storms on gross domestic product (GDP), the broadest measure of economic health, is still being weighed. But the bad jobs report was regarded as a storm-related anomaly by most economists and the stock markets have continued to hit record highs.
The commerce department said the storms probably suppressed business activity in areas including oil and gas extraction in Texas and agriculture production in Florida but added “it is not possible to estimate the overall impact of Hurricanes Harvey and Irma on 2017 third-quarter GDP”.
Consumer spending, which accounts for about 70% of US GDP, gew at 2.4% over the quarter, below recent reports, and may have been suppressed by the storms. But businesses continued to spend robustly with nonresidential fixed investment growing at a 3.9% rate in the third quarter. Exports were weaker and grew at a 2.3% pace while government spending fell at a 0.1% rate.
“The 3.0% annualised gain in third-quarter GDP, which was almost unchanged from the 3.1% increase in the second, will be welcomed by the White House and demonstrates that the hurricanes ended up having little lasting impact on the economy,” Capital Economics said in a note.
While some economists argue that maintaining 3% growth may be difficult given the US’s aging workforce and slowing productivity, the figures are likely to add to the Federal Reserve’s determination to increase rates at its next meeting in December and come as the Trump administration is pushing through a radical overhaul of the tax system which it argues will further spur growth. That assumption has been challenged by Democrats and many economists.