US, Canada and Mexico Agree on North American Trade Agreement

December 18, 2019

This week the political world will be focused on the final House vote to impeach President Trump and the scheduled debate on Thursday between seven of the poll leading Democrats.

There is very little drama surrounding this week’s vote to impeach the President, as everyone knows the highly partisan outcome.  Plus, there is no suspense as to what the Senate will do early next year when they conduct the trial.  Polls show the nation close to evenly divided on impeachment, one development to watch is whether or not there is any significant blowback for the 31 House Democrats who won in 2018 in districts the President carried in 2016. 


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Last week started with an announcement that the US, Canada and Mexico had agreed on a new North American trade agreement, referred to as USMCA, that will replace NAFTA. The deal was negotiated with critical input from Speaker Pelosi with the Administration knowing that her support would be critical to get passage by the Democratic controlled House. 

  • For the week ended December 7, there were 252,000 claims for unemployment insurance, an increase of 49,000 from the previous week's level.
  • This is the highest level for initial claims since September 30, 2017, when it was 257,000.
  • According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended November 30.
  • The advance number of those receiving unemployment insurance benefits during the week ended November 30 was 1,667,000, a decrease of 31,000 from the prior week's level, which was revised up by 5,000.
  • Retail sales increased 0.2% last month and are up 3.3% over November 2018.
  • In November, motor vehicle and parts dealers sales advanced 0.5%, electronics and appliance store sales jumped 0.7%, and gasoline station sales rose 0.7%, while health and personal care store sales fell 1.1% and clothing and clothing accessory store sales dropped 0.6%.
  • Non-store (online) sales increased 0.8% in November and are up 11.5% from November 2018. 

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As expected, the Federal Open Market Committee maintained interest rates at their current 1.50%-1.75% range. For the first time in several months, the Committee's vote was unanimous. In support of its decision to maintain rates, the Committee noted that the labor market remained strong and that economic activity has been rising at a moderate rate. In addition, while household spending has been rising at a strong pace, business fixed investment and exports remain weak. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2%. Based on quarterly projections, the Committee sees the funds target rate ending 2020 at 1.625%, down from the previous projection of 1.875%.

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