Macroeconomics

Data show Car Industry does just well without Donald Trump’s Advice.

As Donald Trump raises political sympathy by using rhetoric against Ford Company, the Auto Industry’s output jumped 10.6 percent in July 2015. Mr. Trump’s remarks in Michigan, on July 12th 2015, questioned Ford Company for planning on building a $U2.5 billion dollars assembling plant in Mexico. The Republican Candidate suggested investments should be driven by national sentiments rather than by profits and economic opportunity. Judging by recent data released on Industry Capacity, the car industry seems to be doing business the right way since its index of industry utilization just jumped to 10.6 percent, whereas production elsewhere in manufacturing increased only by 0.1 percent in July 2015.

By Catherine De Las Salas. August 2015.

By Catherine De Las Salas. August 2015.

Generally speaking, and for Mr. Trump’s information, the largest increase in industrial output for the month of July of 2015 was seen in consumer goods thanks to production in automotive products. It is hard to believe that the car industry is building a plant that would not make economic sense for the company. In fact, Mr. Trump seems to ignore that the industry is doing so well that it shined among other manufacturing related business. Output in other industries such as Machinery, Aerospace and Miscellaneous Transportation, and Miscellaneous Manufacturing declined by 0.2 percent during the same month. Nonetheless, indexes measuring nondurable goods barely moved up in July. Apparel, Paper, and plastic and rubber products increased 1.0 percent each, while petroleum and textile products actually showed losses. So, clearly Mr. Trump is demanding an economic nonsense. It is hard to believe he manages his real estate business with his political standard.

The intersection of politics and economic fosters policy debates in which advocates, such as Mr. Trump, champion their opinions. However, what have remained steady along the years in the United States is the principle of free enterprise which leads the entire economy. Unless Mr. Trump’s remarks were intended to signal the willingness to installing a centralized economy in US, his opinion on Ford Co. business seem more like a statement of Venezuela’s President Nicolas Maduro.

Likewise, “the index for business equipment edged up, as an increase of 3.5 percent for transit equipment was mostly offset by a decrease of 1.5 percent for industrial and other equipment”, reported the US Federal reserve in its monthly publication on Industrial Production and Capacity Utilization. Consumer durable goods index rose by 1.2 percent.

 

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