White House Eyes Infrastructure Win, Chinese Economy Cools
August 15, 2017
Trump signed an executive order on infrastructure. California and other states and municipalities have sued the Trump Administration over funding cuts for sanctuary cities. The US is seeing gains to spending, as China’s economy starts to cool down.
- Trump to sign executive order on infrastructure. The Trump administration is announcing an executive order this afternoon, targeting the lengthy approval and permitting process for infrastructure and real estate development. While the administration has declined to give any further details until the announcement this afternoon, infrastructure spending has long been a priority issue for the Trump campaign and administration. The order regards “establishing discipline and accountability in the environmental review and permitting process for infrastructure projects.” [Reuters]
- California joins groups suing administration over sanctuary city funding cuts. The state of California and the city of San Francisco joined other municipalities suing the Department of Justice over cuts to grants for law enforcement for cities who refuse to comply with national immigration law. By executive order, the Trump administration attacked federal funding for cities that refuse to use municipal resources to catch undocumented immigrants. While a judge narrowed the scope of the order considerably, the administration returned with a much more modest proposition targeting federal funding for increasing the capabilities of local police departments. California argues that it is the responsibility of the federal government, not local police departments, to enforce immigration law. [Reuters]
Economic Indicators & News
- US retail sales show solid spending. Most spending categories were up this past month, as consumers enjoyed strong hiring, low inflation and low interest rates. Overall sales grew 0.6%, and estimates from last month were revised to a 0.3% increase (from a 0.2% decline). Gains included auto dealers, ecommerce, department stores, and sporting goods. While gasoline, electronics merchants, and clothing chains saw sales declines, data doesn’t adjust for prices, failing to account for steady demand but lower prices. [Bloomberg]
- Chinese economy, borrowing cool as Beijing aims for stability. China has defied economic expectations, outpacing even generous expectations in real estate, consumer spending and industrial production for the last two quarters. It seems, however, that Chinese economic growth has come back to earth. The growth of industrial output, retail, investment and trade were all less than expected last month. Beijing has instituted several policies that attempt to slow and stabilize their breakneck economic growth, including tamping down soaring housing prices, which led to a slight reduction in the growth of fixed asset investment. Concerns about rapid debt accumulation and risky loans have also led the Central bank to edge up rates; lending rates averaged .17 points higher in July than in June, which will weigh on businesses attempting to finance growth and capital expenditure. While infrastructure spending and steel production remained at record highs, supported by aggressive government policy, the slowdown begs the question: has Chinese economic growth peaked? [Reuters]