Silicon Valley's bet on Trump starts to pay off
The White House on Wednesday plans to reveal how it will position the United States to lead a global race to develop artificial intelligence and unveil three executive orders intended to boost the American tech sector, according to two people familiar with the rollout who spoke on the condition of anonymity to discuss plans that have not been made public.
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USA Today
27 minutes ago
- USA Today
After a weak jobs report, here's where the economy stands
We learned a lot about the U.S. economy during the past week, but what we learned may leave us asking more questions. Consider a few of the most telling numbers: The encouraging news ◾ GDP grew 3%: The economy rebounded in Q2 after a -0.5% drop in Q1. The first quarter decline was driven by companies rushing to import goods ahead of new tariffs from President Donald Trump. Imports are subtracted from U.S. growth. ◾ Consumers are happier: Both consumer confidence and sentiment continued to climb in July, recovering from their April lows. Consumer spending is the largest part of the U.S. economy. The less encouraging news ◾ Inflation is rising: The Fed's preferred inflation gauge — the personal consumption expenditures (PCE) index — rose 0.3% from May. Economists say the increase may be one of the early signs that tariffs are starting to push up prices. ◾ Job revisions surprise: July's job gains came in at 73,000 — well below the expected 102,000. More concerning, however, were downward revisions to April and May's numbers, suggesting the labor market may be weaker than previously thought. Jobs fallout: Trump fires head of labor statistics bureau after weak jobs report One thing that didn't change this week: The Federal Reserve's stance on interest rates. Chair Jerome Powell and the policymaking committee kept the short-term rate range steady at 4.25% to 4.5%. But, that range may not hold for long. "The weak July jobs report increases pressure on the Fed to cut rates later this year," said Bill Adams, Comerica Bank chief economist. "The decision isn't a slam dunk, since labor supply also fell in July" because the number of foreign-born workers declined. Interest rate traders appear more confident that a rate cut is coming. Their latest bets suggest a 90% chance the Fed will lower rates in September — a sharp jump from the 45% percent chance shortly after the Fed's meeting on Wednesday. Will the Fed cut interest rates? Unable to view our graphics? Click here to view them. How is the U.S. economy doing? What is the U.S. unemployment rate? U.S. unemployment rate rose to 4.2% in July. The monthly number represents the percentage of people who are unemployed and looking for work. What the data shows: The unemployment rate has been relatively steady for the past year, hovering around the 10-year monthly median rate of 4.1%. Economists such as Nancy Vanden Houten at Oxford Economics have speculated that corporate decision makers have been stymied by the uncertainty surrounding tariffs: "The June (Job Openings and Labor Turnover Survey) painted a familiar picture of the labor market: Hiring remains quite low, but so do layoffs." Hiring had held stead throughout the year – although it was well below the 10-year median rate of 226,000 jobs per month. Analysts expected Friday's jobs report would show the economy added about 100,002 jobs in July. Stock prices and bond yields fell following the disappointing report. How big is the U.S. economy? The U.S. economy produced about $30 trillion of goods on an inflation-adjusted annualized basis in the first quarter, but real GDP, the value of goods adjusted for inflation, fell 0.5% in the quarter because imported goods – which subtract from GDP – jumped more than 50%. What the data shows: The Bureau of Labor Statisics report Wednesday morning showed the economy grew 3% in the second quarter – significantly higher than the 2.3% increase analysts expected. Much of the "growth" came from reduced spending on imports. How high is inflation? Inflation, a sustained increase in prices throughout the economy, touched its 10-year median of 2.3% in April – the first time since pandemic spending set off 40-year high inflation. The Fed policymakers say they prefer inflation at 2%, or "low and stable," so we can "make sound decisions regarding saving, borrowing, and investment." What the data shows: Inflation has fallen significantly but remains above the 2% that the Fed targets. The annual inflation rate as measured by the consumer price index rose to 2.7% in June from 2.4% in May. The July CPI report will be released Aug. 12. Are consumers still making purchases? U.S. consumers account for $7 of every $10 spent in the U.S. economy. Retail sales' median monthly increase has been about 0.4% for the past 10 years. That doesn't sound like much until you consider a 0.6% increase in June amounted to an extra $4.6 billion of spending. What the data shows: As the primary engine of the U.S. economy, we bought $720 billion worth of stuff on a seasonally adjusted basis in June. That was a big swing from the -0.9% decline in May. We'll find out Aug. 15 if we continued to spend in July. Gas prices are holding steady Our gasoline purchases aren't a large part of most of our budgets, but it's hard to miss the big numbers outside every station and not have some emotional reaction to their swings. That can have a psychological impact on our spending. One report showed a recent improvement in consumer sentiment closely correlated with lower gas prices. What the data shows: We're in the midst of the summer driving season where gasoline prices typically peak, but a gallon of regular gas has held steady throughout the summer and several cents below last year's prices. So how confident are U.S. consumers now? The University of Michigan measures U.S. consumer sentiment on a monthly basis. The index been as high as 101 ahead of the pandemic in February 2020 and as low as 50 when inflation peaked at 9.1% in June 2022. What the data shows: Consumer sentiment has been rising haltingly since bottomed out in May. Current mortgage rates still elevated While the Fed's interest-rate decisions don't directly affect mortgage rates, they do ripple through the economy and have made the math more difficult for homebuyers. What the data shows: Since November, mortgage rates have moved in a relatively narrow range – between 6.6% and 7% – and well above the 10-year median, according to Freddie Mac's weekly mortgage rate survey. Rates are down significantly from the November 2023 peak of 7.8%. Higher mortgage rates weigh on home sales Existing home sales are the lion's share of homes sold each month. The NAR reports each month's sales at a seasonally adjusted annual rate. Annual home sales peaked in 2005 at 7.08 million units. In September 2024, that number fell to 3.9 million units – lower than sales during any year following the financial crisis. What the data shows: Not surprisingly as mortgage rates have risen, existing home sales have tumbled. At the same time, average home prices are also rising because fewer homes are on the market. Speculation has been that homeowners are unwilling to sell and give up their low-rate mortgages. So how are investors looking at this information? The nation's stock markets are not the economy, but their movements reflect the combined bets investors are making on the economy. Investors have a keen eye on data points like in the charts above. Significant swings in our spending, or even our thinking, might potentially impact corporate profits in coming quarters. What the data shows: After a dip in early April because of tariff-related uncertainty, the S&P 500 has steadily climbed, reaching several new highs since June. The upward trend could suggest that investors are increasingly confident the final tariff agreements won't weigh on the economy as heavily as once feared, but following the employment report Friday all three major U.S. index fell more than 1%. The tech-heavy Nasdaq Composite fell 2.2%. Contributing: Bailey Schulz
Newsweek
28 minutes ago
- Newsweek
Nobel Prize Winners React to Idea of Trump Winning Economics Award
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Past winners of the Nobel Prize in economics have reacted to the suggestion that President Donald Trump's trade agenda has earned him a nomination for the prestigious award. During a Thursday appearance on Fox Business, Peter Navarro, White House trade adviser, said described the effects of the president's sweeping tariff policies as "a fundamental restructuring of the international trade environment." "A lot of people talk about Donald Trump for the Nobel Peace Prize," Navarro added. "I'm thinking that, since he's basically taught the world trade economics, he might be up for the Nobel in economics." U.S. President Donald Trump walks across the South Lawn of the White House after returning on Marine One on July 29, 2025 in Washington, DC. U.S. President Donald Trump walks across the South Lawn of the White House after returning on Marine One on July 29, 2025 in Washington, Do Past Winners Make of the Idea? Newsweek spoke with winners of the prize—officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel—about the prospect of Trump receiving a nomination or winning the award. Newsweek has contacted the White House for a response to the opinions expressed by Nobel laureates in this article. Eric Maskin (2007) "I think it is unlikely that Donald Trump will be awarded a Nobel for economics," said Maskin, who was jointly awarded the prize in 2007 for contributions to mechanism design theory. "The prize is given for discoveries in economics, not for economic policies," he told Newsweek. "And even if it were awarded for a policy, it is far too early to know for sure what the impact of President Trump's tariffs will be." Maskin added that there exists "good reason" to assume that, should the high rates of tariffs imposed by Trump remain in effect, "the long-run effects on the U.S. and the world will be negative—but we will see." Roger Myerson (2007) "The Nobel Memorial Prize in Economic Sciences is a science prize, and so it has been awarded for advances to general understanding in economics," said Roger Myerson, co-recipient of 2007 award alongside Maskin and Polish-American economist Leonid Hurwicz. He noted that the award is not given out for economic policy, noting that former Federal Reserve Chairman and 2022 winner Ben Bernanke was recognized for his scholarly work on the Great Depression, and not his actions during the 2008 financial crisis. 2007 Nobel Prize in Economics laureate Roger Myerson speaks at a symposium with co-winner Eric Maskin at the House of Sweden in Washington 26 November 2007. 2007 Nobel Prize in Economics laureate Roger Myerson speaks at a symposium with co-winner Eric Maskin at the House of Sweden in Washington 26 November 2007. Nicholas Kamm/AFP via Getty Images "As president of the United States, Donald Trump has made decisions that will also have great economic impact on millions of people's, for better or for worse," Myerson told Newsweek. "But if Peter Navarro wants to make the case for him as a candidate for a Nobel Memorial Prize in Economic Sciences, it should be based on Donald Trump's contribution to our understanding of what is a good economic policy." Myerson said that many of Trump's recent policies had challenged conventional economic wisdom, but that to make a strong case for the award the president would need to "publish papers that engage with the economics literature and identify the different assumptions that have led him to choose his policies." "If President Trump truly has important insights to offer about economic policy-making, his publishing a thoughtful rigorous development of his ideas could be an important contribution to economic sciences," he added. "I should warn him, however, that the number of important contributions to economic sciences is greater than the number of prizes that the Nobel Committee is able to recognize." James Heckman (2000) "Let me put it this way: He is more deserving than Barack Obama," said Heckman, referring to the 2009 Peace Prize given to the former president only nine months into his first term. He said that a peace prize for Trump could be justified, "if he succeeds in bringing peace to the Middle East." However, Heckman, who was awarded the economics prize in 2000 for his work on econometrics, said he was "sure" Trump could never win this award "because of his abrasive commentary." "The bias against his politics is immense everywhere and he is not as polished as most laureates are," he told Newsweek. Heckman agreed with Navarro that Trump had attempted to restructure global trade, but said the "jury is out" on the impacts of this. "But who knows. The times they are a-changing and [Bob] Dylan won for literature." William Nordhaus (2018) Responding to Navarro, whom he called "an unreliable source of theory and commentary," Nordhaus told Newsweek he was skeptical that Trump's trade policies had achieved anything besides undermining America's global leverage. "The way I understand Trump's 'successes' is this: The United States has over the decades built up an enormous reservoir of soft and hard power as well as good will around most of the world—a vast amount of social capital," said Nordhaus, who won the award in 2018 "for integrating climate change into long-run macroeconomic analysis." Yale Professor William Nordhaus speaks to attendees during a press conference after winning the 2018 Nobel Prize in Economic Sciences at Yale University on October 8, 2018 in New Haven, Connecticut. Yale Professor William Nordhaus speaks to attendees during a press conference after winning the 2018 Nobel Prize in Economic Sciences at Yale University on October 8, 2018 in New Haven, Connecticut."Trump has drawn upon that social capital and is using it like a spendthrift teenager to achieve virtually nothing of value and to destroy many critical parts of the global institutional infrastructure," Nordhaus said. He added that Trump could be a "leading contender" for the Ig Nobel Prize. Past winners of this satirical prize, awarded annually since 1991, include Russian President Vladimir Putin and Edward Teller, the Hungarian-American physicist known as the "the father of the hydrogen bomb," as well as Donald Trump himself, a co-winner of the 2020 award for Medical Education due to his perceived mishandling of the COVID-19 pandemic. What Others Are Saying White House trade adviser Peter Navarro told Fox Business on Thursday: "This is a fundamental restructuring of the international trade environment in a way where the biggest market in the world has said you're not going to cheat us anymore. We're going to have fair deals." "Everything he's doing has defied the critics," Navarro added. "The tariffs have been tax cuts rather than inflation, and it's working beautifully." White House press secretary Karoline Leavitt, during a recent press briefing, said: "President Trump has brokered, on average, about one peace or ceasefire per month during his six months in office. It's well past time that President Trump was awarded the Nobel Peace Prize." Jeffrey Frankel, economist and professor at the Harvard Kennedy School, told Newsweek that the prospect of Trump receiving the economics prize is "beyond absurd" and that there is "no chance whatever that he would be seriously considered." "Regarding policies enacted, Trump's tariffs may go down in history because the effects will be so bad and, much as the Smoot-Hawley tariff of 1930 did, may teach a generation or two about the harms of tariffs and the value of listening to warnings from professional economists, when they are virtually unanimous," he said. "I must say, I put the probability of Trump winning the Nobel Prize as well below the probability of the U.S. invading Sweden," he added. What Happens Next? As well as the White House press secretary, Trump has been tapped to receive nominations for the Nobel Peace Prize by Pakistan, Israeli Prime Minister Benjamin Netanyahu and, most recently, Cambodia. Prize announcements for all Nobel prizes typically occur in October, followed by award ceremonies held in December.
New York Times
28 minutes ago
- New York Times
Trade Fueled Inequality. Can Trump's Tariffs Reduce It?
During the three-decade heyday of globalization, goods and money ping-ponged their way to every corner of the world, generating stupendous amounts of wealth, trade and technological innovation. At the same time, the wealthiest countries experienced startling rises in inequality at home. In the United States, where the gap between the rich and everyone else is among the highest in the world, some of those hit hardest were working people without college degrees. Now, free trade believers are swimming against the tide. President Trump has raised tariffs to their highest levels in nearly a century. The president doesn't talk much about inequality. But his animating argument for tariffs — that they will pressure companies to bring well-paid manufacturing jobs back to America — is pitched to those workers who felt left behind and neglected. So, will the tariffs reduce inequality? Probably not, and here's why. Hyper globalization certainly contributed to America's rising inequality. Consumers saved hundreds of dollars on the cost of televisions, shoes and comforters. But many middle-class livelihoods and communities were destroyed when factories either relocated to countries where wages were lower or went bust because they couldn't compete with cheap imports. China's entry into the global marketplace at the beginning of this century delivered a major wallop. Between 1999 and 2011, Chinese imports were directly responsible for the loss of 2.4 million American jobs, according to researchers. It is true that more jobs were created, but many of them did not pay as well as those that were eliminated, nor were they taken by the workers who lost out. Want all of The Times? Subscribe.
