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US economic growth slowed in 2019, hit by trade wars

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The US economy in 2019 expanded by the slowest rate since President Donald Trump took office as worsening trade friction undermined investment and exports, according to new government data released Thursday.

The $21 trillion economy grew by 2.3 percent compared to 2018, according to the government’s initial estimate.

Though that result remains stronger than many advanced economies, it is far from Trump’s promised target of 3.0 percent or higher.

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And economists warn that the details are far less encouraging.

American consumers remained relatively upbeat and continued to buy homes, taking advantage of low interest rates, but spending waned in the final three months of the year, according to the Commerce Department report.

AFP / US GDP

The growth slowdown from the 2.9 percent expansion in 2018 came amid Trump’s escalating confrontation with China last year, which created uncertainty that led businesses to put the brakes on investments, as well as reducing exports and imports, while raising costs for inputs.

Business investments — a category known as “nonresidential fixed investment” — plummeted for three consecutive quarters last year, which analysts at Oxford Economics note is the worst performance since 2009 at the height of the global financial crisis.

Trade collapsed in the final quarter of 2019, with exports flat, and imports falling by the largest amount since 2009, with thousands of products subject to punitive duties in Trump’s multi-front trade wars.

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– Election year –

Trump is counting on using a strong economic message to boost his chances of winning a second term in November, but even as the trade picture has improved in recent weeks, uncertainty remains.

He signed a “phase one” trade deal with China, which cheered stock markets despite a lack of details and skepticism among some analysts. But tariffs on two-thirds of the products exchanged between the economic powers remain in place.

White House economic advisor Larry Kudlow said the US has a “fundamentally healthy economy,” and repeated the administration’s view that the China deal will be a boon for businesses and growth.

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“As we move toward implementation, phase one, even though it may have caused uncertainties before, it will pay off in major growth dividends later this year,” Kudlow said Thursday on Fox Business Network.

But analysts at Oxford Economics said the data are deceptive and create “the optical illusion of an economy chugging along.”

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“Businesses are facing the worst outlook since 2016 with lingering headwinds,” they said, warning that although Trump’s trade deals are encouraging, “euphoria about an impending surge in activity would be misguided.”

In the final three months of the year, US gross domestic product rose 2.1 percent, the same pace as in the third quarter and better than economists had forecast.

Economist Joel Naroff warned that US consumer spending decelerated as the “weakening in wage gains is starting to show through,” which is combined with the “unwillingness of businesses to spend.”

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Growth and exports likely were undercut by the crisis at Boeing, which halted production of its top-selling 737 MAX after it was grounded worldwide in March 2019 in the wake of two deadly crashes, as well as the lengthy strike at General Motors.

And the outbreak of a new coronavirus in China, which has sickened thousands and killed nearly 400 threatens to undermine the newfound sense of stability on the global economy, raising concerns that growth could be derailed.

Federal Reserve Chairman Jerome Powell said Wednesday the US central bank is keeping an eye on the possible impacts, as businesses in China shut their doors and airlines cancel flights to the country.

Photo: AFP / Johannes EISELE


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2020 Election

Jeff Sessions ridiculed after losing GOP primary for his old Senate seat in Alabama

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Former Sen. Jeff Sessions (R-AL) attempted a political comeback by running in the GOP primary for the Senate seat he long held.

Sessions resigned the seat to serve as President Donald Trump's attorney general, before the two had a falling out.

"On Tuesday, Mr. Sessions lost the Alabama Senate Republican runoff election to Tommy Tuberville, a former Auburn University football coach whose platform was largely a blanket promise to support the president at all times," The New York Times reports. The Daily Beast also projected that Tuberville had won.

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Senior Trump advisor says a senior White House advisor ‘has been wrong about everything’

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On Tuesday, in an op-ed for USA TODAY, White House trade adviser Peter Navarro attacked the nation's foremost infectious disease expert, Dr. Anthony Fauci, claiming that he "has been wrong about everything I have interacted with him on."

"In late January, when I was making the case on behalf of the president to take down the flights from China, Fauci fought against the president’s courageous decision — which might well have saved hundreds of thousands of American lives," wrote Navarro. "When I warned in late January in a memo of a possibly deadly pandemic, the director of the National Institute of Allergy and Infectious Diseases was telling the news media not to worry."

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CNN

Anderson Cooper tears into Trump for lying about coronavirus death rate: ‘This is just ludicrous’

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On CNN Tuesday, anchor Anderson Cooper led his show with a searing indictment of President Donald Trump for his ongoing lies about his management of the coronavirus pandemic.

Cooper particularly took umbrage at Trump's claim, at the day's Rose Garden press conference, that "we have just about the lowest mortality rate" and only seem to have more cases because "we do tremendous testing. We have the best testing in the world."

"This is just ludicrous," said Cooper. "This is the president of the United States. More than 130,000 people dead in this country and he's continuing this ridiculous lie, it's nonsensical. It defies any belief. We shouldn't be surprised because this is what he does. This is one of president's favorite lies. The United States is not the best or close to it in deaths — it's the seventh-worst in the world. The testing doesn't discover them. According to Redfield and others, the cases we know about are probably far underestimating the actual spread of this virus."

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