Buoyed by the growth strategies of the Trump Administration, the U.S. economy posted remarkable gains in July as other countries struggled to find traction.
According to the Wall Street Journal, manufacturing and service indexes reached an 18-month high of 54.7. The measure, which tracks manufacturing expansion or contraction, improved from 50.3 in June. Under the index, measures above 50 point to growth.
“It’s solid. We’ve had a few reasons to worry that the recovery might have lost momentum or gone into a bit of a reverse, but they don’t seem to have materialized,” senior U.S. economist at Capital Economics Michael Pearce said. “The economy seems to be powering ahead.”
Lockdowns and forced business closures during the second quarter inflicted a downturn of 32.9 percent. In what appears to be the fastest economic recovery of the country’s history, third-quarter growth is pegged at over 18 percent. Productivity across all sectors remains 8.2 percent lower than July 2019, due to the hospitality industry not achieving full capacity yet. Restaurants are widely operating at 50-percent seating and travel has slowed. But even with uncertainty about a vaccine, hospitality industry leaders are talking bout a quick turnaround.
“I am no more optimistic about the virus than I was a month ago,” Marriott International executive Arne Sorenson reportedly said. “I am, however, more optimistic about the recovery of travel and the recovery of our business.”
That being said, the housing sector is in the midst of a boom that far outpaces existing homes and new construction sales of a year ago. Home sales surged by 25 percent in July, setting the highest mark since December 2006.
“The housing market is actually past the recovery phase and is now in a booming stage,” the National Association of Realtors economist Lawrence Yun reportedly said. “New demand has been created because of the pandemic, with the work-from-home flexibility.”
First-time home buyers accounted for 34 percent of sales in July, a sure sign that the low-interest rates pushed by the Trump Administration and economic confidence are working. New construction improved by 22.6 percent in July, far outpacing expectations.
Stock markets are not just rebounding from the shutdown. The S&P 500 recently set a high-water mark for the second time under the Trump Administration.
“It’s not so much about good vs. bad news. The market cares about whether things are getting better versus worse,” LPL Financial strategist Ryan Detrick said. “The economy is still nowhere near its output prior to the pandemic. But things are getting better.”
Although the establishment media was quick to tout the European Union as the model for pandemic recovery, the bloc appears to be entering a second wave of economic decline. Manufacturing indexes are in retreat and multi-national leaders are expected to roll out another wave of stimulus.
“Uncertainty about the economic outlook and the pandemic is keeping the central bank on high alert,” ING Bank in Frankfurt economist Carsten Brzeski reportedly said.
Recent data indicates that Europe has been unable to regain its footing through the disruption. The 19-nation union suffered more than 12 percent contraction during the 3-month pandemic peak, compared to only 9.5 percent by the U.S. It’s manufacturing numbers continued to decline during July as well.
The EU is also manipulating furlough schemes that pay workers less than they were earning as part-timers in an effort to keep them off unemployment. They mirror the type of government-and corporations-first policies Americans were stung by during the Financial Crisis under the Obama-Biden administration.