re: The US trade deficit PLUMMETS 16% in one month, from May to June.

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So exports barely dropped 0.25% and imports dropped 3.65% and you think thats bad. Thats winning.

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Or another way to describe overall economic activity in the trade sector is down by roughly $14 Billon. If that's winning, I'd hate to see losing.

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The economy expanded by 3.0% on 2nd qtr after contracting by 0.5% in 1st qtr.

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So, for the first 6 months of the year, the economy grew by whopping 1.25%. Again, if that is winning, you and I have different definitions. And would you like to know the numbers behind that 3% GDP? It's not as rosy as you think:

Govt spending up 0.8 p over Q1
Personal consumption up 0.9pp over Q1
net exports up 6.3 pp over Q1
gross private investment is down 1.5pp over Q1

Yeah, that gross private investment sort of explains:

1) Construction spending being down
2) Manufacturing being down
3) And now, the service sector is down

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My argument for tariffs were as follows:

1. Protectionism.
2. Tax burden diversification.
3. National security.

Wealth creation is not a good argument.

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Protectionism is silly unless it's tied to national security. You're giving DC the massive power to pick winners and losers for no metrics other than who's powerful enough to protect their donors.

#2 sounds good in theory but it's not going to happen. Whatever receipts are collected are just more money going to Washington; they're not going to replace the income tax.

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Neither are trade deficits, which is why most of the responses to this are mindless team cheering. This 16% shift might be good, might be bad, might not mean anything at all. Details matter here

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Correct

If we ever get to a full on surplus it's probably not a good sign though.

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Neither are trade deficits, which is why most of the responses to this are mindless team cheering.

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The single most misunderstood thing in the MAGA-sphere. Kind of mind blowing how horribly they are understood.

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Will these revisions push the fed to lower rates to stir job growth?

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After the job numbers were announced on Friday the odds market for a September rate cut went over 50%.

So, yes.

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Its natural if youre a wealthy nation.

We will always have trade imbalances as long as we are the top dog economically.

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Coming out of WW2 we had the highest share of global GDP.....and we had trade surpluses til the mid 70s......

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Sounds like y'all are aligned on this

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Yes, but it is misleading stat on the state of our manufacturing position. Similar to how GDP growth from tech does not have the same impact on middle america as GDP growth from trades or (lower tech) manufacturing.

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Fifty-seven percent of Americans say they’re living paycheck to paycheck in 2025.

Young adults, women and parents with children living at home are more likely to report living paycheck to paycheck.

Seventy-two percent of Generation Z and 65% of millennials report living paycheck to paycheck.

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MarketWatch

This not a sound economy for a stable society, this how guys like Mamdani get elected. Protectionist policies is how you strengthen the middle. Protectionism does impact top line GDP, but its well worth the trade off for the gains in the middle

If we are serious about fixing the nations fiscal woes, we need to cut welfare. Cutting welfare without protectionism to support livelihoods is how you get peasant riots. Someone without a job could give two shits if the economy grows because a company with 10 employees is raking in billions from being hyper efficient

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So am I correct in assuming the over-estimate was/is part of the rationale for the Fed keeping rates high?

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The PCE report (the Fed relies upon it) played a large role in keeping the rates where they are. It showed inflation ticking upward.

Here's the opening to the article:

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The Federal Reserve's preferred inflation measure — the Personal Consumption Expenditures, or PCE — ticked higher last month, signaling that President Trump's tariffs are pushing some prices higher.

Prices rose 2.6% in June compared with a year ago, the Commerce Department said Thursday, up from an annual pace of 2.4% in May. Excluding the volatile food and energy categories, prices rose 2.8% in the past year, the same as the previous month, which was revised higher.

The figures help illustrate the central bank's reason for its decision Wednesday to keep its key interest rate steady, with Federal Reserve Chairman Jerome Powell stressing that inflation still remains above the Fed's goal of a 2% annual rate. Powell suggested it could take months for the central bank to determine whether the president's new import duties would cause just a one-time rise in prices, or a more persistent increase in inflation.

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It's worth reading the whole thing.

CBS News

Good news but a single data point doesn't make a trend...

Let's see where we are in 6+ months....