Trump taps China trade critic and economics professor Peter Navarro for new White House post

The new office will advise Trump on trade negotiation strategies and work to boost domestic manufacturing and defense jobs

President-elect Donald Trump will tap Peter Navarro, an economics and public policy professor who helped craft Trump’s trade policies during the campaign, to lead a new trade council inside the White House, his transition office announced Wednesday.

Read more at Politico: Trump taps China trade critic Navarro for new White House post

The University of California-Irvine professor has been closely connected to Trump since the campaign, advising the president-elect on a number of economic areas and contributing to the trade policy platform he called “defensive” but “not protectionist.”

“The formation of the National Trade Council further demonstrates the President-elect’s determination to make American manufacturing great again and to provide every American the opportunity to work in a decent job at a decent wage,” the transition office said in a news release. “Navarro is a visionary economist and will develop trade policies that shrink our trade deficit, expand our growth, and help stop the exodus of jobs from our shores.”

Read more at Politico: Trump taps China trade critic Navarro for new White House post

The new office will advise Trump on trade negotiation strategies and work to boost domestic manufacturing and defense jobs. Its creation will almost surely cut the influence of the Office of the U.S. Trade Representative, which has traditionally had authority over trade negotiations.

Navarro has long been a critic of China and its trade relationship with the United States. He has written books on the subject and created a documentary film titled, “DEATH BY CHINA: How America lost its manufacturing base.”

Read more at Politico: Trump taps China trade critic Navarro for new White House post

Fed Raises Rates, Boosts Outlook for Borrowing Costs in 2017

 

Federal Reserve officials raised interest rates for the first time this year and forecast a steeper path for borrowing costs in 2017, saying inflation expectations have increased “considerably” and suggesting the labor market is tightening.

The Federal Open Market Committee cited “realized and expected labor market conditions and inflation” in increasing its benchmark rate a quarter percentage point, according to a statement Wednesday following a two-day meeting in Washington. New projections show central

Source: Fed Raises Rates, Boosts Outlook for Borrowing Costs in 2017 – Bloomberg

Trump and the Fed may clash on inflation

The Federal Reserve could clash with President-elect Donald Trump on its core responsibility to keep prices stable.

To control inflation — the gauge of prices changes — the Fed regulates borrowing costs. Cheaper borrowing costs makes it easier to spend, raising demand and prices.

The Fed has kept borrowing costs near zero since the economy started to falter nine years ago, but is now normalizing interest rates, as inflation gradually rises and the labor market improves.

Trump’s massive infrastructure-spending plan could trigger a much faster jump in inflation. It’s not guaranteed, and there are questions about how much of the promised economic growth it would actually spur. But since the election, interest-rates traders have priced in a much steeper trajectory for inflation.

Read more at Business Insider: Trump and the Fed may clash on inflation – Business Insider

US economy adds 178,000 jobs in November; unemployment rate drops to 4.6%

The U.S. economy added 178,000 jobs in November, while the unemployment rate fell to 4.6 percent, a level not seen since August 2007, according to government data released Friday morning. The first employment report since voters went to the polls last month shows an economy in strong shape as President-elect Donald Trump prepares to take office.

“It looks like firms are pretty bullish about what they’re going to see in 2017 and are continuing their strong hiring of the past few years,” said Steve Rick, chief economist at insurance company CUNA Mutual Group. “This is a good tailwind for the new administration.”

Read more at The Washington Post: U.S. economy added 178,000 jobs in November; unemployment rate dropped to 4.6 percent – The Washington Post

What would economists do? Carrier incentives stir debate over ‘rewarding’ offshoring

The $7 million incentive package Carrier Corp. will receive as part of a deal the company reached with President-elect Donald Trump and Vice President-elect Mike Pencerepresents a departure from how tax credits are typically used in Indiana.

It’s also the kind of agreement Trump slammed on the campaign trail.

The furnace manufacturer will receive $5 million in tax credits over 10 years in exchange for keeping 1,069 jobs at its Indianapolis plant, with an average wage of $30.91 hour. The company also will receive $1 million in training grants and up to $1 million in additional tax credits based on Carrier’s planned $16 million investment in the west-side factory.

Read more at USA Today: Carrier incentives stir debate over ‘rewarding’ offshoring

But the deal differs from most other economic development agreements in Indiana, where incentives are usually aimed at luring jobs, not merely retaining them. In fact, about 400 workers at Carrier will still lose their jobs under the deal, as will 700 employees at a related company in Huntington.

Some experts say the deal sets a troubling precedent.

“It’s a potentially dangerous policy where you reward a company that threatens to leave. It’s a dangerous precedent. Why wouldn’t every other company make the exact same pitch?” said Steve Weitzner of Silverlode Consulting, a site-selection firm. “In this case, you’re rewarding a company that is actually cutting a lot of jobs in the state.”

But others say that economic development has to be handled on a case-by-case basis.

“It’s a judgment call,” said Mitch Roob, who led the state’s economic development agency under then-Gov. Mitch Daniels. “The IEDC has a fair amount of leeway, as they should, because there’s no way for the legislature to understand what the particular circumstances might be at a point in time.”

Read more at USA Today: Carrier incentives stir debate over ‘rewarding’ offshoring