In this latest issue of my weekly podcast, we discuss the Democratic National Convention. This week the DNC will run from Monday through Thursday night. The convention has stressed Biden's moderation. On Monday night, unusually, four prominent Republicans were to invited on stage to denounce Trump and endorse Biden. While the on-line "infomercial" format might fire-up the base, the lack of a live audience probably dampens the excitement for most Americans.
Still no progress on stimulus. The large $600 federal UI bonus terminated on the week ending July 25. My take? Many people can't afford to live on the unaugmented state benefit. They are either not bothering to pick them up or they are going back to work for less money. Going back to work may give an immediate boost to employment--which you can see in the Real-Time Population Survey for the last two weeks. But it is also--and perversely--going to reduce aggregate demand by pulling down DPI and act to reduce (a) the economic growth multiplier, (b) the investment accelerator, and (c) inflation pressure.
Biden chooses his VP. Last Friday, Joe Biden announced Senator Kamala Harris as his running-mate. Harris was a risk averse choice. She has been vetted by the media, she is comfortable on the national stage, and her ethnicity is a draw for both Asians and African-Americans. While the Senator brings charisma to Biden's campaign, the needless "identity politics" process by which Biden chose Harris was a turnoff for most Americans.
Economic indicators slow down. Retail sales MoM came in at +1.2% for July, below expectations of 1.9%. The growing number of C19 cases is believed to have kept shoppers home. Michigan Consumer Sentiment remained unchanged from June to July as consumers await a new stimulus bill. And the NAHB Housing Index hit a 22 year high, coming in at 78 for July.
US solidifies relations with Taiwan. The White House has finalized plans to sell Taiwan 66 new F-16 fighter jets. HHS Secretary Alex Azar also visited the island to meet with President Tsai Ing-wen. China has responded by conducting new military demonstrations and flying fighter jets across the Taiwan Strait median line.
Belarus embroiled in protests. Since President Lukashenko won reelection with 80% of the vote, massive demonstrations have gripped the country with accusations of election fraud. Hundreds of thousands have filled the streets calling for Lukashenko to step down. Putin has publicly declared Russia will invade Belarus if "western" protesters threaten the stability of the country. Should we brace for a repeat of the Ukraine invasion? This is definitely Putin's "near abroad."
A new study predicts that the world population will peak decades ahead of the UN forecast thanks to declining fertility rates. Instead of the year 2100, the study estimates the global population will peak in 2064 and that the elderly will also make up a larger share of the total than the U.N. projects.
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