Kevin Hassett, currently the head of the Council of Economic Advisors in the Trump Administration, is now the leading candidate to be nominated as the next , Bloomberg reported. One thing that I can say about Kevin Hassett is that he always seems to be happy when he talks to the media. So, it would be interesting if Hassett became the Fed Chairman, since he would likely be putting a positive spin on things, since Kevin is a “glass half full” guy versus a “glass half empty” person. If President Trump nominates Kevin Hassett, he is obviously demanding loyalty, but also an upbeat economic spokesperson for the Fed.
Speaking of the Fed, the report was disappointing and below economists’ consensus estimate of a 0.3% increase, so this may help coax the Fed to cut key on December 10th. Specifically, the Commerce Department reported on Tuesday that retail sales rose 0.2% in September, down from 0.6% in August. In the past 12 months, retail sales rose 4.3%. Interestingly, vehicle sales declined 0.3% in September, despite the fact that the $7,500 tax credit boosted the sales of electric vehicles. Spending at bars and restaurants rose 0.7% in September, which is a sign that consumers have some disposable income.
The talk of a “K-shaped” economic recovery where the boomers are spending money, while younger consumers are struggling, is undoubtedly true. The key for the Fed and the Trump Administration is for the “velocity of money” to rise, since the faster money changes hands, the more prosperity spreads.
Despite ongoing labor market concerns, the Labor Department reported on Wednesday that new declined to 216,000 in the latest week, which is the lowest weekly claims in over seven months (since mid-April). The four-week moving average of weekly jobless claims also declined to 223,750. Continuing jobless claims rose by 7,000 to 1.96 million.
The Commerce Department reported on Wednesday that rose 0.5% in September, which was better than economists’ 0.3% consensus estimate. Defense orders surged 31% in September. Excluding defense orders, durable goods orders rose 0.1%. Excluding transportation, durable goods orders rose 0.6%, which was substantially higher than economists’ consensus estimate of a 0.2% increase. Core capital goods surged 0.9% in September, which is the largest monthly increase in almost three years.
Glass Half Full: Hassett’s Fed Bid Meets a Mixed Economic Picture
