Economic

Statement from U.S. Secretary of Commerce Wilbur Ross on Q1 2020 GDP Advance Estimate

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Today, the Department of Commerce’s Bureau of Economic Analysis (BEA) released the advance estimate for gross domestic product (GDP) for the first quarter of 2020, finding that real gross domestic product contracted at an annual rate of 4.8 percent.

U.S. Secretary of Commerce Wilbur Ross issued the following statement in response:

“Today’s GDP numbers are weak, but in line with expectations as a result of the COVID-19-driven disruptions to daily lives at home and around the globe that have rocked global markets and supply chains. We continue to have the most resilient economy in the world, driven by innovative and hardworking Americans who have shown that they are willing to make the needed sacrifices to defeat this invisible enemy.

The President has taken bold action to leverage the expertise and resources of the entire Nation in this fight. Congress has confronted the seriousness of this challenge with trillions of dollars in relief funding for those impacted by the virus, establishing a firm footing for a swift and strong American comeback. When this chapter ends, America will be both stronger and healthier than ever because of the President’s decisive and timely actions.”

EXIM Board Approves $91.5 Million in U.S. Export Financing for Project in Senegal

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WASHINGTON – The Board of Directors of the Export-Import Bank of the United States (EXIM) yesterday unanimously approved approximately $91.5 million in loan guarantee financing that supports U.S. exports of design engineering and construction services to the Republic of Senegal. The transaction will increase access to reliable electricity for rural communities throughout Senegal while supporting an estimated 500 U.S. jobs in 14 states: California, Colorado, Florida, Georgia, Illinois, Kentucky, Mississippi, Missouri, New Hampshire, Nevada, Ohio, South Carolina, Tennessee, and Wisconsin.

The transaction – which is expected to bring electricity to approximately 330,000 Senegalese in more than 400 villages – will advance four of EXIM’s priorities as set by Congress. Specifically, this transaction supports a small-business exporter, Weldy-Lamont LLC of Mt. Prospect, Illinois; the export of U.S. manufactured goods and services to sub-Saharan Africa; renewable energy technology through the export of solar panels; and the “Program on China and Transformational Exports” as outlined in EXIM’s recent reauthorization. United States-based Weldy-Lamont was selected for the project over foreign competition being supported by at least four other governments, including China.

This transaction also advances the goals of the Trump Administration’s Prosper Africa and the President’s Advisory Council on Doing Business in Africa (PAC-DBIA) initiatives, which aim to substantially increase two-way trade and investment between the United States and Africa.

“The selection of Weldy-Lamont for this project is a significant win for not only for this Illinois-headquartered small business and its workers across fourteen states, but also for the United States and Senegal,” said EXIM President and Chairman Kimberly A. Reed. “Building on my discussion with Senegal’s Minister for Economy, Planning, and Cooperation Amadou Hott during our October 18, 2019, Memorandum of Understanding (MOU) signing ceremony, this transaction demonstrates Senegal’s willingness to consider alternative financing and export including those from the United States, for critical infrastructure needs beyond Chinese sources. We are pleased to support this U.S. small business as it exports its ‘Made in the U.S.A.’ renewable energy products to sub-Saharan Africa.”

“This deal fulfills several of EXIM’s goals, including supporting small businesses and competing with China on a global scale,” said EXIM Board Member Spencer Bachus III. “There’s no more important time for EXIM than today. With the spread of coronavirus, our job will be more challenging, but it will be more important than ever.”

“I can think of no better first project for us with the Republic of Senegal than this Weldy-Lamont deal to provide rural electrification to about 415 villages,” said EXIM Board Member Judith Pryor. “This deal is part of a whole-of-government approach that encompasses the goals of both Prosper Africa and Power Africa, and we are honored to work with our sister agencies toward these goals.”

The financing was approved under EXIM’s MOU with Senegal’s Ministry of Economy, Planning and Cooperation. The Senegal National Electricity Agency (Senelac) will be the borrower in the transaction and the buyer of the exports. Senegal’s Ministry of Economy, Planning and Cooperation will provide a sovereign guarantee of the financing. JP Morgan Chase is the lead arranger and mandated lender. The total cost of the project is estimated to be $100 million, with EXIM supplying 81.5 percent of the funding.

For the project, Weldy-Lamont – a Chicago-area small business with fewer than 20 employees – plans to source from a large U.S. supply chain to procure American-manufactured electrical and solar-energy equipment, as well as a variety of services. EXIM’s financing is expected to support an estimated 500 American jobs in 14 states.

The proposed project will consist of low-voltage power lines along existing roads to rural villages, with more remote villages to be served by the establishment of a mini-grid of stand-alone solar units and limited low-voltage lines. The completed project will reduce the need for community-based diesel generation of electricity and will connect hundreds of villages to the grid.

The EXIM Board initially approved a preliminary commitment on Oct. 30, 2019. In addition to EXIM, other federal agencies involved in promoting the selection of Weldy-Lamont for the project include the U.S. Departments of State and Commerce, the U.S. Agency for International Development, and the U.S. Trade and Development Agency.

EXIM Small Business Outreach and Relief Efforts

During the open portion of the meeting, the Board received an update from EXIM’s Small Business Division. Senior Vice President of Small Business Jim Burrows noted that since EXIM’s board quorum was restored in May 2019, EXIM has authorized approximately 1,635 small business transactions, totaling $1.7 billion, and supporting thousands of U.S. jobs.  

Earlier this month, EXIM instituted temporary relief measures that provide assistance to U.S. businesses, their buyers, financial institutions, and American workers negatively impacted by COVID-19 (coronavirus). Complete information is available on the coronavirus response page. “EXIM recognizes that in the months following the COVID-19 outbreak, exporting may be a challenge for many of our nation’s businesses, especially small businesses,” said Burrows. “EXIM staffers are working tirelessly to ensure our nation has the proper programs in place to provide U.S. exporters with the financing and other products necessary to export ‘Made in the U.S.A.’ goods and services.”

Office of Small Business Director of Outreach and Education Elizabeth Thomas focused on EXIM’s new digital outreach strategy, which was launched in November 2019, alignment with associations whose members would benefit from EXIM’s services, and direct customer outreach. Since the digital strategy kickoff, EXIM has engaged over 2800 “new to EXIM” contacts and attributes 73% of FY 2020 authorizations to digital outreach. Particularly given this time of COVID-19, “digital outreach allows us to stay connected with small businesses and provide much needed support in a safe and healthy way,” said Thomas.

EXIM Open for Business in 191 Countries

In additional to the voting on the Senegal project during the closed portion of the meeting, the Board of Directors also heard from EXIM’s Enterprise Risk Committee and approved changes to EXIM’s Country Limitation Schedule (CLS) that are effective April 6, 2020. The changes will be reflected at that time on EXIM’s website.

“As elevated demand for EXIM support, as well as support from competitor export credit agencies around the world can be counter-cyclical in nature, EXIM will be needed even more over the next several months to accomplish its mission to support U.S. jobs through exports,” said EXIM Chief Risk Officer Ken Tinsley, “I am confident in EXIM’s ability to execute this mission successfully while at the same time protecting the U.S. taxpayer.”

The CLS is a document that expresses whether EXIM is open or closed for business in a given market. Country conditions in markets in which EXIM is open must meet EXIM’s Charter-mandated requirement of a reasonable assurance of repayment. EXIM’s Board has established a linkage between the reasonable assurance of repayment mandate and the country risk ratings from the Interagency Country Risk Assessment System implemented by the Office of Management and Budget. These ratings, which are subject to routine evaluation, reflect the repayment risk of doing business in a market and are required to be used by all U.S. government agencies engaged in cross-border credit activities to estimate expected loss. With this update, EXIM is open for business in 191 countries.

ABOUT EXIM:

EXIM is an independent federal agency that promotes and supports American jobs by providing competitive and necessary export credit to support sales of U.S. goods and services to international buyers. A robust EXIM can level the global playing field for U.S. exporters when they compete against foreign companies that receive support from their governments. EXIM also contributes to U.S. economic growth by helping to create and sustain hundreds of thousands of jobs in exporting businesses and their supply chains across the United States. In recent years, approximately 90 percent of the total number of the agency’s authorizations has directly supported small businesses. Since 1992, EXIM has generated more than $9 billion for the U.S. Treasury for repayment of U.S. debt. 

Statement from U.S. Secretary of Commerce Wilbur Ross on Q4 and Annual 2019 GDP: Economy Grows 2.3% in 2019

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Today, the Department of Commerce’s Bureau of Economic Analysis (BEA) released the fourth quarter and annual gross domestic product (GDP) numbers. The Bureau found that the real gross domestic product increased at an annual rate of 2.1 percent in the fourth quarter and 2.3 percent for all of 2019, continuing to beat expectations.

“Since the beginning of this Administration, critics have predicted doom and gloom for the American economy,” said Commerce Secretary Wilbur Ross. “They were wrong then, and they are wrong now. President Trump continues to unleash incredible growth in the American economy despite the effects of Boeing’s problems with the 737 MAX and the General Motors’ strike. GDP for 2019 is more great news for the American economy and is even better than what today’s numbers show due to those two special factors. Beyond this, Americans continue to experience tremendous increases in employment and wages that prime 2020 for further economic gains. When you add in the benefits of USMCA, the Phase One Deal with China, the two trade deals with Japan, and the re-working of the free trade agreement with South Korea, America is back and competing on the world stage.”

The GDP continues to beat performance predictions before the 2016 election, and there was other good news in the BEA report:

  • The U.S. has the largest GDP of any country in the world, and it continues to grow at a sustained rate. U.S. GDP reached an all-time high in 2019 of $21.43 trillion.
  • The growth of the goods GDP rose by an impressive 4.7 percent, while services was at 1.7 percent.
  • Consumer spending increased by 2.6 percent last year and spending on durable goods surged by 4.7 percent in 2019.
  • Personal income reached an all-time high of $18.6 trillion, up from $17.8 trillion in 2018.
  • The personal savings rate increased to 8 percent for the year, with Americans saving $1.31 trillion in 2019, up from $1.21 trillion in 2018.
  • The long period of massive import surges of goods is finally abating. For the year, imports of goods rose by only 0.2 percent, the lowest yearly increase since 2009.

BEA Reports 17 of 22 Industry Groups Contributed to the 2.1 Percent Increase in Real GDP in 3rd Quarter.

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Nondurable goods manufacturing; retail trade; and professional, scientific, and technical services were the leading contributors to the increase in U.S. economic growth in the third quarter of 2019, according to gross domestic product (GDP) by industry statistics released by the Bureau of Economic Analysis. Both private services- and goods-producing industries contributed to the increase; the government sector increased slightly. Overall, 17 of 22 industry groups contributed to the 2.1 percent increase in real GDP in the third quarter.

Nondurable goods manufacturing increased 10.1 percent in the third quarter, after decreasing 0.3 percent in the second quarter.
Retail trade increased 8.2 percent, after increasing 0.2 percent.
Professional, scientific, and technical services increased 5.6 percent, after increasing 7.4 percent.
“In the 3rd quarter of last year, retail and wholesale trade fueled the continuing economic resurgence. With growth in 17 of 22 sectors, American Industry continues to thrive thanks to the pro-growth policies of the Trump Administration,” said Commerce Secretary Wilbur Ross.

Presidential Delegation to Switzerland to attend the World Economic Forum

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WASHINGTON– President Donald J. Trump announced the Presidential Delegation that will attend the World Economic Forum in Davos-Klosters, Switzerland, from January 20 to January 24, 2020. Steven Mnuchin, Secretary of the Treasury, will lead the delegation.

Members of the Presidential Delegation:
Steven Mnuchin, Secretary of the Treasury (Lead)
Wilbur Ross, Secretary of Commerce
Eugene Scalia, Secretary of Labor
Elaine Chao, Secretary of Transportation
Robert Lighthizer, United States Trade Representative
Keith Krach, Under Secretary for Growth, Energy and the Environment, Department of State
Ivanka Trump, Assistant to the President and Advisor to the President
Jared Kushner, Assistant to the President and Senior Advisor to the President
Christopher Liddell, Assistant to the President and Deputy Chief of Staff for Policy Coordination

Measuring the Value of the U.S. Space Economy

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According to the Commerce Department’s website，The Space Economy Satellite Account (SESA) is a new, collaborative effort to measure the relative importance of the space sector on the U.S. economy, with a special emphasis on the growing commercial space segment. This new account is part of the economic satellite accounts produced by the Bureau of Economic Analysis (BEA). A satellite account refers to statistics that complement BEA’s official U.S. economic statistics, such as GDP and personal income. These satellite accounts provide additional detail and allow for a more in-depth analysis of key sectors of the U.S. economy, such as health care, travel and tourism, and outdoor recreation.

Using input from industry experts and multiple government agencies, chiefly the U.S. Department of Commerce (DOC) Office of Space Commerce, the forthcoming SESA statistics will show the impact of the U.S. space economy on the overall U.S. economy. Specifically, the SESA statistics will provide an estimate of the space economy’s contribution to current-dollar gross domestic product (GDP) and will illustrate the contributions of individual industries to the U.S. space economy. In addition to GDP, the SESA will include gross output, compensation, and employment by industry statistics for the space economy.

U.S. Economy Increases at a 2.1% Pace in the Third Quarter

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Real gross domestic product (GDP) increased 2.1 percent in the third quarter of 2019, according to the “third” estimate released by the Bureau of Economic Analysis. The growth rate was unrevised from the “second” estimate released in November. In the second quarter, real GDP rose 2.0 percent.

GDP highlights

The third-quarter increase in real GDP reflected increases in consumer spending, government spending, housing investment, and exports, while business investment and inventory investment decreased. Imports, which are a subtraction in the calculation of GDP, increased.
The increase in consumer spending reflected increases in both goods (notably recreational goods and vehicles as well as food and beverages) and services (led by other services, notably personal care and legal services, as well as housing and utilities). The increase in government spending reflected increases in federal and in state and local government spending.

The decrease in business investment reflected decreases in structures (led by mining exploration, shafts, and wells) and in equipment (notably aircraft as well as computers and peripheral equipment).

Updates to GDP

While overall GDP growth was unrevised from the second estimate, upward revisions to consumer spending and business investment were offset by a downward revision to inventory investment.

Corporate profits from current production

Profits decreased 0.2 percent at a quarterly rate in the third quarter after increasing 3.8 percent in the second quarter. Corporate profits decreased 1.2 percent in the third quarter from one year ago.

Profits of domestic nonfinancial corporations decreased 0.5 percent after increasing 3.2 percent.
Profits of domestic financial corporations decreased 1.1 percent after increasing 0.6 percent.
Profits from the rest of the world increased 1.0 percent after increasing 7.7 percent.

BEA Releases First Official Release of Gross Domestic Product by County

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BEA Graphic on Percent Change in Real GDP by County, 2018
(Bureau of Economic Analysis (BEA) )

Real gross domestic product (GDP) increased in 2,375 counties, decreased in 717, and was unchanged in 21 in 2018, according to estimates released today by the U.S. Bureau of Economic Analysis (BEA). The percentage change in real GDP ranged from 86.5 percent in Jackson County, WV, to -44.0 percent in Grant County, ND.

GDP is the value of goods and services produced within a county. The size of a county’s economy as measured by GDP varies considerably across the United States. In 2018, the total level of real GDP ranged from $18.4 million in Issaquena County, MS, to $710.9 billion in Los Angeles County, CA.

Highlights

Large Counties: 141 counties with populations greater than 500,000 in 2018

  • Real GDP increased in 136 and decreased in 5.
  • GDP ranged from $11.2 billion in Pasco County, FL, to $710.9 billion dollars in Los Angeles County, CA.
  • Santa Clara County, CA, (10.2 percent) was the fastest growing large county. The information industry was the leading contributor to the county’s growth.
  • Kern County, CA, (-0.7 percent) had the largest percentage decrease in GDP. The mining, quarrying, and oil and gas extraction industry (primarily oil and gas extraction) was the leading contributor to the decrease

Medium Counties: 464 counties with populations between 100,000 and 500,000 in 2018

  • Real GDP increased in 433, decreased in 30, and was unchanged in 1.
  • GDP ranged from $2.0 billion in Saline County, AR, to $52.6 billion dollars in Morris County, NJ.
  • Canadian County, OK, (21.0 percent) was the fastest growing medium county. The mining, quarrying, and oil and gas extraction industry (primarily oil and gas extraction and support activities) was the leading contributor to the county’s growth.
  • San Juan County, NM, (-6.1 percent) had the largest percentage decrease in GDP. The mining, quarrying, and oil and gas extraction industry (primarily non-oil and gas mineral extraction) was the leading contributor to the decrease.

Small Counties: 2,508 counties with populations less than 100,000 in 2018

  • Real GDP increased in 1,806, decreased in 682, and was unchanged in 20.
  • GDP ranged from $18.4 million in Issaquena County, MS, to $13.3 billion dollars in Karnes County, TX.
  • Jackson County, WV, (86.5 percent) was the fastest growing small county. The construction industry was the leading contributor to the county’s growth.
  • Grant County, ND, (-44.0 percent) had the largest percentage decrease in GDP. The agriculture, forestry, fishing, and hunting industry was the leading contributor to the decrease.

BEA to Release First Official GDP Estimates

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The size of every county’s economy with industry detail will be officially released for the first time by the U.S. Bureau of Economic Analysis on Dec. 12.

BEA will estimate annual gross domestic product, or GDP, for the years 2001 through 2018 for more than 3,000 counties. The data will include contributions to GDP by 34 industries, such as manufacturing, retail trade, and health and social assistance.

Measuring GDP at the county level is a milestone in BEA’s efforts to better capture how economic activity is distributed across the nation. This new information, in high demand by data users, will complement the county personal income statistics BEA has produced since 1975.

GDP for counties and metropolitan statistical areas will be published together at 8:30 a.m. on Dec. 12 in a new joint release called Local Area Gross Domestic Product, 2018. It replaces the Gross Domestic Product by Metropolitan Area release of previous years.

BEA will continue to publish annual county and metro GDP statistics each December. In addition to industry contributions to GDP, the data will include current-dollar GDP; inflation-adjusted or real GDP; percent change from the preceding year; and quantity indexes.

The county statistics can be used for comparisons to other counties, metropolitan areas, state economies, or the nation overall.

They can answer questions such as:

  • What is the size of a county’s economy?
  • Is its economy growing or declining?
  • In which industries does the county specialize?
  • What industries are driving its growth?
  • What has been the county’s economic growth trend over time?

Business owners, county officials, and policymakers at all levels of government can use these statistics to make better-informed decisions about investments, economic development, or economic policies.

High-quality, consistently defined time series data for counties across the United States will aid research into topics such as the distribution of national economic output, local economic dynamics, and the effectiveness of economic development strategies.

Like county personal income data, the new GDP statistics will cover 3,113 areas, including county equivalents such as Louisiana’s parishes and Alaska’s boroughs, the District of Columbia, and the independent cities in Maryland, Missouri, Nevada, and Virginia. Kalawao County, Hawaii, and the smaller independent cities of Virginia are combined with adjacent counties.

GDP statistics are based on the place of production, such as the county where an office or factory is located, regardless of where the workers live. This differs from BEA’s personal income statistics, which measure the incomes of all people residing in a county, no matter where they work.

For example, a person who works in Los Angeles and commutes home to Riverside County, Calif., contributes to Los Angeles County’s GDP but Riverside County’s personal income data.

BEA released prototype county GDP data last December and sought evaluation and feedback from data users. The responses and further research led BEA to refine its methodology and add significant industry detail to the coming official release.

U.S. Economy Grows 1.9 Percent in Third Quarter

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Today, the Department of Commerce’s Bureau of Economic Analysis (BEA) released the third quarter GDP growth number for 2019. The Bureau found that real gross domestic product increased at an annual rate of 1.9 percent in the third quarter.

“Today’s report shows that the U.S. economy continues its steady growth in defiance of media skeptics calling for a recession,” said Secretary of Commerce Wilbur Ross. “Since President Trump took office, wages have surged, unemployment has hit record lows, and poverty has fallen for all Americans, including the country’s most vulnerable.”

In the third quarter, U.S. consumer spending grew a healthy 2.9 percent, as American consumer confidence continued to buoy our country’s economic strength. Spending on durable goods led and jumped 7.6 percent from the second quarter. Business intellectual property investment rose 6.6 percent, signaling that American business will continue to lead the world with new ideas and inventions. The 1.6 percent growth in goods exports demonstrates that President Trump’s trade policies are bringing Made in America back.

This quarter’s growth number builds on a strong legacy of economic growth and accomplishments under President Donald Trump.

In September 2019, unemployment in the U.S. fell to 3.5 percent, hitting the lowest level in 50 years. The unemployment rate for Hispanic Americans and African Americans were also at record lows. The total numbers of employed Americans hit the highest level on record. Between 2017 and 2018, 2.3 million moreAmericans gained full-time, year-round employment, including 1.6 million women.

This has translated to higher incomes for average Americans. The Census Bureau reported in September that real median household income rose to more than $63,000 in 2018, the highest level in nearly two decades. Between 2017 and 2018, real median earnings of full-time, year-round workers rose 3.4% and 3.3% for men and women respectively. This good news tracks with Labor Department numbers, which marked more than a year of consecutive year-over-year hourly wage increases of 3.0 percent or higher. Before 2018, wage gains had not hit 3 percent since 2009.

The poverty rate has tumbled as well. In 2018, the poverty rate fell by 0.5 percent to the lowest level since 2001, as the growing economy lifted 1.7 million Americans out of poverty since just 2017. Disadvantaged groups such as Hispanic Americans and African Americans saw the largest poverty reductions. America’s children saw a 1.2 percentage points in poverty, while poverty for single mothers fell by 2.5 percentage points.

President Donald Trump’s economic and trade policies are delivering wins for the American people. A strong economy is lifting millions out of poverty and giving American workers long overdue pay increases.