The inflation report this week reflected the CPI for July showed a jump of 5.4% in line with expectations of 5.3%. Core prices rose 4.3%. Mr. Powell is continuing to say these increases are post COVID events that would slow down.
Canada had an unexpected and dramatic jump in July in its trade surplus to $3.23 billion. This trade surplus is the largest since 2008, as it beats analysts’ estimates of $.68 billion with exports leaping 8.7%, hitting a record $53.76 billion. This is indicative of the economies, particularly in North America recovering from COVID, but also around the world. In typical Canadian understatement, the Chief Economist at Canada’s Export Development Agency stated, “This is a very pleasant surprise”.
This week the Senate passed 69 to 30 the much debated long-argued infrastructure bill, proving that Democrats and Republicans can, in fact, get together, reach compromise and bring important legislation to fruition. This to me, is extremely important, not just because it is infrastructure, but because, in fact, compromise was reached. Maybe we are on the way back.
The political response to Governor Cuomo’s resignation followed the path one would anticipate. One striking difference, that being Congresswoman Stefanik, who had a mantra of “He should be arrested and prosecuted for sexual harassment; for his book deal and nursing home undercount.” With the same words being virtually regurgitated in each case. There were no good wishes for Lt. Governor Hochol, nor the people of the State of New York. Ms. Stefanik has truly stepped off the edge of partisanship. The comments of State Senator Stec and Assemblyman Simpson, both Republicans, were much more in line with a rational thought process tinged with the Republican point of view.
Late last week 6 House moderate Democrats wrote to the Speaker saying they would not vote for the larger 3.5 trillion bill unless the infrastructure bill was voted upon and passed first. This small group of moderates – because that’s all that are left – took a strong stand and I think the right one. There is too much at risk using the Speakers’ approach for across-the-board failure.
Afghanistan is much in the news. The most credible analysis that I heard came from a retired Army Colonel who stated that Afghanistan being overrun is the fault of the Afghan government and military. This is the simple and pathetic truth. No matter how long we stayed, this day would have come. The news media and Republican’s refusal to focus on Afghan responsibility shows how each group looks to sell their product, not tell the truth.
COVID surges in places like Florida and Texas. The position taken by their governors is akin to Nero’s watching Rome burn. Interestingly there has been an uptick in vaccinations as I pointed out last week which is certainly a good sign and may help to slow this variant.
This week’s job data was mixed with unemployment claims up to 375,000 which was anticipated but is not a good signal. Simultaneously earnings reports have been “nothing short of spectacular” according to Jeff Schulze of Clear-Bridge Investments.
President Biden announced that he wanted OPEC to expand drilling (in other words produce more) as the reluctance to do this is nothing more than a combined effort to raise prices. They’re succeeding not on real economic activity but artificially holding back.
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford, Owens, Piller, Murnane, Kelleher and Trombley in Plattsburgh, NY and a Strategic Advisor at Dentons to Washington, DC.
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